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Everyone has seen television commercials with slogans like “buy now pay later”.
You don’t need to save up your money to buy that new car, that wide-screen TV, that latest smartphone, or that vacation to a tropical island, when you can have all of these things right now.
Instant gratification is a very expensive habit; One that will lead you to a life of financial challenges.
Some advertisements contain misleading statements; One I read, “Helping you move forward.”
Such slogans suggest that the finance company is doing a favor to the borrowers which is far from the truth.
Moneylenders and finance companies thrive on financial ignorance; A person with a basic foundation in personal finance will stay away from loan sharks as if they have tested positive for Covid.
One should ascertain whether the item is a want or a need before signing on the dotted line.
Many people get into debt because they want to live the champagne lifestyle on a lemonade budget just to impress their friends. They are not happy living in dignity.
An expensive lifestyle is expensive in the long run.
The parable of the prodigal son is a perfect example. Here was a young man who squandered his inheritance and was living in poverty because of his lifestyle.
Not only did he blow his inheritance but most likely he was living on credit.
It is debt that really kills a person’s chances of financial success. That interest rate is dead money; This is the cost of borrowing.
Paying interest on goods bought on credit increases their value and many goods bought on credit lose their value once they are in your possession.
A simple philosophy to adopt is, “If you don’t have the money you don’t buy it”.
What you feel you cannot live without is something others have learned to live without.
It all depends on the choices we make.
There are some circumstances when it may be wise to borrow such as when the value of the item you are buying is going to make it financially worthwhile such as student loans. This may or may not mean that you will get a well paying job but you must be very clear that this is what you want to do otherwise the course will be a total waste of money.
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