Avoid debt - that will kill you

“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”-Adam Smith

We normally don't think on trivial things like taking debt in form of EMI for buying new mobile phones with so many features that we are not going to use, but just for the showoff, we buy it. The same is true with the cars, we buy more specious cars, costly, beautiful looking and so many features but on the cost of debt in the form of auto loans. Why? just to impress or jealous others or just to feel good. We do such many things in our day to day life and we don't have any thought on it.

Normally, if we think closely, we find that we don't need such things like costly mobile phones, costly cars etc. In budget mobile phones and cars also, we can fulfill our needs. Even this thing is dangerous for our pockets and for our health as well. Observe your surroundings, most of the people are very busy with their mobiles while driving, walking (Though very less people do walk now a days). Most of the people have very costly cars and they drive alone in those cars most of the times.

I know many people will not agree with my logic here but that doesn't matter, it's your money, your life and your decisions, i am just sharing my thought on it.

There are many forms of debts in the market like credit card debt, student debt, personal loans, and marriage loans. We think they’re necessary but they’re not. They cause more headaches than they’re worth, they can ruin lives, and they cost us way more than we get.

By participating in this debt game, we joined the rat race, that will force us to do more work and ruin our life and relations with our loved ones.

Now a day, getting money is easy but in the form of loans. In old times the Zamindars or land lord gives loan to the farmers and the farmers die while returning the interest of the loan itself. Now the Zamindars is replaced by financial institutions (NBFC, Banks etc) and the farmers are replaced by educated and job doing people like you and me.

In this debt system, everything is converted into a business. The cost of college education today is so high that many young people are giving up their dream of going to college, while many others are graduating deeply in debt.

Benjamin Franklin suggested on not taking debt as below:

"Rather go to bed without dinner than to rise in debt."

The famous essayist, lecturer, philosopher, and poet Ralph Waldo Emerson compared a debt laden person with a beggar. As per Emerson:

"A man in debt is so far a slave."

Believe me, taking debt is easy but repaying the debt back with interest will kill you. Currently i am in the process of repaying my home loan (Anyway it is said that home loan is a good loan, so i don't worry more about it), so I can agree with Mr. Emersion. The loan is forcing me every day to do more work and at the end of the month pay the EMI.

Till here, we have discussed some types debts and how they impact us. Let's see some of the ways, how we can save ourselves from this debt.

- It might be on sale, but that doesn’t mean you’re saving if you don’t need it. Uninstall unnecessary marketing and shopping apps from your mobile. Because, when you see some sell, you are tempted to buy in less price, but actually you are not saving anything in this process, if you actually don't need that sell item at this point of time. 



- Knowledge is power. Try to not collect credit cards. there are so many offers on credit cards but remember it is a trap. Teach your teens about credit cards. Help them avoid the debt trap.


-try to stay away from debt trap. Don't buy unnecessary items, if you don't need them. Never use payday loans to keep up with debt payments.

On buying unnecessary items that you don’t need; warren buffet warns us as below:

"If you buy things you don't need, you will soon sell things you need."

- Learn to say no. This skill of saying NO will save your life, save your time, save your relations and many important things in life. Say no to unnecessary spending, to the salesperson, to yourself sometimes, to your smartphone shopping apps (I suggested say to unnecessary use of your mobile and TV). To develop any skill, will take time. So, develop the skill of saying NO and start saving from today. Let’s take help from Warren Buffet again for the skill development:

"No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant."

- Go for shopping with a shopping list and buy only that is mentioned in the list. It will save you a lot of time that you can invest in more reading and a lot of money. It will also save you from unnecessary buying. Whatever money you save by this activity, just invest that money for long time and let compounding play it's game.


-Planning for a vacation, it's good but plan with cash not with credit cards. Save first and then go for vacation. Always follow:

income -saving=expenses

You should develop the discipline to save first before spending; if you spend first before saving, there will be nothing left over to save after all the expenses. ... To start, set aside at least 5% of your income for savings

Once your debt finished if any, then start building an emergency fund first thing! it will help you in crisis timing. Bro, planning is everything in case of finance. Plan your spending, saving, and debt repayment. any costly item buying like car, home, plan it then save accordingly and then buy it. Try to reduce your online shopping as much as possible. Online shopping is another fancy way to get money out of your pocket.

Remember: if you can’t pay for it, you can’t buy it.

There will be many more ways, that you can suggest me and the other readers of this blog. Please share your suggestions in the comment box.

Thanks,
Mahesh