Tagalog Version (Click Here)
“Debt is like any other trap, easy enough to get into, but hard enough to get out of.” – Josh Billings
One step forward, two steps back. You might think that borrowing money and maxing out your credit cards is fine, but it’s not. It seems harmless at first, until you borrow again, and again, and again, and suddenly you’ve accumulated a mountain of debt. Whenever you’re tempted to overspend and borrow money, just remember these three reasons on why you should just skip unnecessary purchases and avoid bad debts.
1. Don’t ruin your future by burying yourself in debt.
Are you fine with spending decades working to pay for old and broken things you bought years ago? Are you comfortable with seeing your entire paycheck disappear just to pay your credit card bills and payday loans? Never forget this lesson (from A New Perspective to Avoid Bad Debts): If you get the habit of spending your future income NOW, then you’ll spend the rest of your days working just to pay it all back.
“No one can be happy, no matter how optimistic, who is forever in the clutches of poverty, of harassing debt.” – Orison Swett Marden
2. Worrying about debt will blunt your skills and intelligence.
“Where will I get the money to pay?” is a phrase often said in despair, and I hear it often from people I know. Whenever they have money problems or there’s something expensive that they want to buy, they borrow money from their friends and families to pay for it. And to pay back what they owe, they borrow even MORE money from OTHER friends and family. After that, they tend to spend the rest of their time hiding from those who lent them money or they’d continue “borrowing” more (without intending to pay). It happens more often than I’d like.
If you were in their situation, will you be able to think of career advancement, business opportunities, or investing when you’re too busy avoiding people and worrying about all the debts you owe? You most likely won’t. Having bad debts is like playing chess with a gun pointed at your head. Your fear won’t let you think straight, and that’s how you’ll fail. Like what Orison Swett Marden explained, your enthusiasm and zeal are very precious assets and nothing will kill these more effectively than knowing that you’re in a trap, that your hands and feet are tied by the curse of debt.
3. Bad Debts stop you from finding opportunities.
Orison Swett Marden said that bad debts “ruined many of the most promising careers.” I knew several people who thought of moving to better jobs or starting new careers… but they couldn’t leave their old ones because they have too many bills and debts to pay.
Think about it: Can you quit your job right now to start a new business or change careers if you have a mountain of debt and snowballing credit card bills to pay every month? You COULD have earned more than what you have now and you COULD have become wealthy… but you never took the opportunity because you were scared. You were scared because failure means getting buried alive by mounting debt payments and fees.
So why did you get into debt in the first place?
Was it for a shiny new car? And expensive phone or some other gadget? Eating out at pricey restaurants? An expensive vacation? Excessive groceries and junk food? A dozen luxury shirts and dresses instead of a few great quality ones?
One of the hallmarks of financially successful people is their ability to think long term. They can see how debts will affect their future so they live within their means in order to avoid bad debts. Most people on the other hand want instant gratification, and that’s why they spend more than what they earn and get into debt by buying things they don’t need. That’s how a lot of people end up failing financially.
If you want to earn a good financial future, you have to avoid things that could destroy it. Start living within your means, pay back all that you owe, and avoid bad debts.