Debt happens when you spend more than what you earn. While everyone can go into debt, it is important that you stay out of it as much as possible and instead pay in cash for products bought and services used. It can be tempting especially for a mom who wants to help make both ends meet. If you are one of those mothers who are already struggling to provide for your children’s needs, what with the increasing prices of commodities, you may be tempted to go into debt. Giving in to wants will also be tempting, especially with your neighbours and friends bragging on social media their family travels, the latest gadgets, stylish clothes, and even trips to spas and salons. Everywhere you turn you get to be reminded of the things you lack, things you don’t really need but end up being pressured to have in order not to be left out.
But let this be a reminder for you, mothers: once you go into debt, you may find it hard to get out, and instead of saving up for your family’s future, you end up paying for your past expenses. When you’re caught up with too many bills, most likely your debt will pile up as you may end up taking in more debt to pay for some expenses. It’s a reality you have to face, and if you fail to identify the habits that got you into debt in the first place, you may not learn from your past debt mistakes and will continue to repeat those mistakes.
You’re Not Alone, Everyone Can Get Trapped Into Debt
Borrowing money is already almost a normal occurrence in our modern society. Take for example the mortgage loan you have to take for you to be able to own a house. When you get the house, you will have to fill it with furniture and appliances. The average person will find it hard to acquire everything without taking in debt. While debt is not really a bad thing, it can easily get out of hand. If you can’t help borrowing money for something very important, you have to avoid taking on any additional debt.
Stealing From Your Future
Each cent you borrow must be repaid, with interest. Every cent going to paying down the debt is money that you could have had down the road. You’re borrowing against what you expect to be your future income, and it may not be as steady as you might hope, as there may be unexpected expenses that are highly likely to pop up from time to time. You will have less left to spend on things you enjoy the more you borrow, which can keep going and be a cycle wherein everything coming in is going out again and there is no money left for years to come until it is paid off. There is a way to help reduce debt interest, however, and that is through consolidation loans from specialists like Debt Fix unsecured bad credit loans.
Things Become Overly Expensive
When we buy our groceries, we tend to pay attention to the prices, to make sure we are getting a good deal, often choosing a product a few cents or dollars less than something else. When it comes to credit though, our common sense often goes out the window. Rather than saving for a year or so the same amounts our monthly payment is likely to be, we buy expensive items so we can have them now, and pay sometimes 50% or more than the cash price.
Medical and Stress Problems
Being heavily in debt can leave you with stress and frustration, worrying about how you are going to meet all of your commitments. It can be tempting to take on more debt to alleviate short term issues, but the debt and the anxiety will still remain. Such stress can lead to health problems which may affect your ability to work, thus reducing your income and exacerbating the problems all round.
Loss Of Freedom
Being in debt limits your options in life and the more debt, the fewer options remain to you. Many have thought about going travelling for a year after college or university, though being in debt means you need to take employment immediately to start bringing the bill down. Finding the capital to set up your own business may not be possible if the funds you have coming in with which you could do it, are already going straight back out again to pay off loans.
Prevents You From Building Wealth
Compound interest works both ways. Investing to generate a return means you have more in the future than you had when you started. Borrowing works in reverse and detracts from your ability to amass wealth. Much of that which we purchase with credit is not really essential and if we had to pay cash only, many of those purchases we would not make. Our reliance and use of credit is our long term detriment, so should be avoided if it is not being used to help us grow our future, rather than satisfy our short term desires.