Today’s Topic: The highly dramatized stigma behind debt and why no one wants to be in debt.
Debt: the moment you hear that word you think “no money”, “poor”, “financially unstable”, and thousands of other terms that all describe someone (usually not you) with a negative balance in life. If you tell a friend you’ve got X amount of debt, they’re either shocked that you would think to do such a thing to yourself or relieved to hear that they’re not alone.
So why is debt seen as such an evil thing in today’s society when it’s so easy to get into?
To understand why debt is so bad, let’s think about what exactly debt is and the most common forms of it. You’ve got credit card debt, student loans, home loans, personal loans, and car loans. Some people may have just one, others might have all five. Regardless of type or amount, many people borrow money they don’t have simply because it’s been made so easy to do so in today’s society. The fact that credit card companies in certain countries are allowed to decide whether or not you’re allowed to get financing for a home, large loan, or automobile says a lot about the important of manageable debt.
If you want to get an education but don’t have the funds to spend, take out a student loan and pay off your tuition using wages you get from the job you land with your prestigious new degree. Borrow money from the bank to take the family on vacation by paying it off for a few months after you return. Get a nicer car that will save you on visits to the mechanic and give you easier access to jobs and activities in your area. Start paying towards a home that you could own outright before retirement.
The list of reasons why people get into debt are endless, but there are certainly negatives to living such a lifestyle. The basic concept of borrowing money is that you’re spending future assets (and then some when you factor in interest charges) in the present. Sure, it’s fun going on a trip every now and again, but working overtime for months after you return to pay off the debt caused by the trip isn’t very fun.
If you’re a savvy spender and don’t borrow more than you can pay back in a reasonable amount of time, you’re not likely to have many problems unless the unnexpected happens and your funds can’t be allocated towards your debts. If you’re not the best at managing your money and just want to feel happy shopping with a shiny credit card by buying items you may not even need, debt will certainly catch up with you and make you wish you had never signed up for the card in the first place.
Debt may be a necessary evil in many of our lives, but we don’t have to let it run our lives completely. Overall, keep your debt low and your happiness will stay high.