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 is not really normal. Here are five reasons it’s not normal to be in debt.
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 that is true. You have to follow the lenders terms. They have the right to take your property away if you don’t make your payments, because you gave them that right in order to make your purchase .
We shouldn’t want things so much that we become slaves 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 now. 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 it yourself?
For most people, the most exciting time in a purchase is just before you get the item. Once you have it 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.
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, they have the right to take possession of your item. You may have paid more than double the original value and still lose your item.
4. Paying cash makes you think more - and that is good!
People are more reluctant to purchase things when they have to pay cash for them. You can use this tendency to your advantage. Besides getting a better deal and paying less for your item, this hesitancy 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.
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 and add the cash you have saved to the proceeds. 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!
What you tolerate becomes normal to you. When you stop tolerating debt, you increase your ability to function without it. It will take you some time, but the end is worth it!
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God Bless your week!