Don’t go broke, read how to manage your debts

In human life debt is inevitable, that makes it very difficult to give people advice on how to manage their finance. Reasons financial expert find it very difficult in dealing with debt issues is the fact that people need and desire many things with their “limited” financial resources.

There are two main problems about debt. Firstly, most of us commit to more debt than we can afford to repay. Secondly, most of us commit to repaying debt before putting money aside for future needs, things that should take priority like our children’s education, savings for emergency, and provision for our retirement.

These days people tend to live the life where the pressures to buy and to show off the things we have bought (materialism) is enormous.

Experts say credit can become addictive resulting in impulsive buying habits. The fact that you can afford something does not necessarily mean that you can have it. If credit is not applied responsibly, it can have tremendous destructive consequences.

However, people are judged by what they have, rather than who they are. This has developed traditions in which people compete against each other regarding material possessions. To live within your means and you need to plan now for the things you’ll need in the future. The starting point will be to understand the difference between needs and wants.

You need to take care of your needs first before looking at wants.

Depending on credit is living on borrowed money which is a very expensive option. Try to save money for the things you may need that are not needed urgently. When you buy something on credit, you are actually borrowing someone else’s money.

Do not overspend your income and do not over commit yourself with credit purchases. Look for ways of making extra money. This should be something that will not require much of your time and should not cost you an arm and a leg.

-Businessday

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