5 reasons debt shouldn’t be “Normal” for you

Many people are taught that you have to go into debt in order to purchase things that you want. But should that be normal?  Learn more in this week’s blog.

People assume that the normal way to make a big purchase is by borrowing money to buy what you want. But that syhould not be your  normal. Here are five reasons debt shouldn’t be normal for you.

1. Debt makes you a slave to the lender

A wise man said long ago, “the borrower is servant to the lender.” Proverbs 22:7

If you think about it, you’ll see that this is true. You have to follow the lenders terms. Lenders have the right to take your property away if you don’t make your payments. You gave them that right in order to make your purchase .

You shouldn’t want things so much that you become a slave to them. And borrowing money definitely makes you a slave.

2. Debt makes you pay more for your item 

Business schools teach students that interest is a cost of doing business. But that really is not true. Interest is is an increase in the price you pay for what you buy. Why should you pay more for something just because you can’t pay for it right no?  What you should be doing instead is saving money until you have enough to pay for your item, then you will get a better price AND be able to buy more things with your money!

3. Debt gives the lender money-wouldn’t you rather use your money yourself? 

For most people, the most exciting time in a purchase is just before you get the item. Once you have the item in your possession, the excitement decreases significantly.  But even though the excitement wanes, you still have to make the payments and pay the fees and interest associated with the note you agreed to accept from the lender to make that purchase.

The lender, on the other hand, continues to make money while you are paying off your note. If you miss a payment, even the very last one, the lender have the right to take possession of your item. Think about this: You may have paid more than double the original price and still lose your item!  Lender repossession came down hard on the housing market.

4. Paying cash makes you think more - and that is good!

People are more reluctant to purchase things when they have to pull out cash to pay for them. You can use this tendency to your advantage. Besides getting a better deal and paying less for your item, a hesitancy to pay cash will help you decide if the item is really worth it to you.

Often people make purchases on the spur of the moment and end up using their money on things that they don’t really want or need. Because they have purchased it on credit, they end up committing their resources for an extended period of time. They pay too much for the item and aren’t able to do other things that they would’ve enjoyed more. Has that ever happened to you before?

5. Get the previous model- this gives you time to save for the pricier model!

Often big ticket items seem out of reach without using debt. But there is a way to get to those high ticket items. It is done in stages. Start with a used or a lower priced model. Use it for a time while you save more money. Then trade or sell the model you have.   Add the cash from selling to your savings. Soon, you will be able to get a better model. Repeat the process until you reach your goal model. 

This method meets your needs while increasing your ability to get better models!

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At www.BudgetingEssentials.com we want to help you become debt free.

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You’ll be amazed how free you feel without debt! And just imagine the things you could do if you had no debt!

Anything you tolerate becomes normal to you. When you stop tolerating debt, you increase your ability to function without it.  You can get yourself debt free. It will take you some time, but the end is worth it!- Dan Heiland

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God Bless your week!