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7 Things you should never do if in debt

7 Things you should never do if in debt

Written by R. A. Stewart

If you have consumer debt of some kind then there is a responsibility and an expectation that you will honour those debts and pay them off in good faith. It is your responsibility to repay whatever you owe and there is an expectation by the lender that he or she will be repaid the amount they lent plus any interest on the loan.

Taking responsibility for your financial affairs and not just burying your head in the sand when problems arise is a part of being a mature adult. Any money you have left over after paying your fixed costs is called discretionary spending money. Your debts are fixed costs which means they must be paid for. You do not have any discretionary spending money if you have consumer debts.

There are things which you must NEVER do when you have debt of any kind. Here is my list of no nos as for debtors.

  1. Subscribe to Satellite TV

This is something which you should never do when you are in debt. The cause of debt is the inability or unwillingness to live within your means and make sacrifices. Sky TV is something which you can do without.

  1. Go on an overseas holiday

How on earth can a debtor go on an overseas holiday when they have debts to pay? A person with a conscience would not be able to relax and enjoy themselves. 

  1. Spend money at the bookies

When you are in debt any money in your possession does not belong to you, it belongs to your creditors. You should not be gambling if you are in debt. That is irresponsible. The amount of money is inconsequential, even if it is just $5 on a lottery ticket every week. That is $5 that could be used to pay off your debt. 

The lower your debt the less interest you have to pay.

  1. Go out for a meal

This is another big no no for a debtor. Money spent in restaurants is something you do with discretionary spending money and since you are in debt, you do not have any discretionary spending money. If you have a partner who insists on being wined and dined, tell them straight out that you need to pay back your debts before going on nights out. If he or she doesn’t understand that then give him or her their marching orders.

  1. Subscribe to netflix

This is also something you do with your discretionary spending money. Netflix is a drain on your finances and your spare time. You cannot have a debt and Netflix at the same time.

going to the rugby

  1. Buy expensive gifts

It is all very well showering loved ones with expensive gifts for birthdays and Christmas but not Okay if you are in debt. You are the one who is paying for this madness, not your loved ones. 

Buying stuff on credit is only delaying the inevitable; the crunch always comes when you have to pay it all back plus interest. 

This all boils down to prioritizing your spending. If you are in debt then paying your creditors has to take precedence over everything else; that is after your fixed costs have been taken care of.

  1. Buy a new car

This is one of the worst decisions you can make when in debt because if you are already in debt then you have no more to buy a car therefore, the only way that you can acquire one is to borrow more money and this will keep you in poverty. I suspect that none of my readers will be stupid enough to make this mistake because people who are financially literate read articles which increase their financial education.

About this article: The information in this article is of the opinion of the writer and may not be applicable to your personal circumstances therefore discretion is advised. Feel free to share this article. You may use this article as content for your ebook or blog/site.

Www.robertastewart.com

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DANGER OF DEBT

The disadvantages of being in debt

“The debtor is a slave to the lender.” Proverbs 22:7

Being in debt limits your options and opportunities in life! If you are in debt, you are chained to the borrower- in other words, you are your lender’s slave. Slavery as we know it was abolished a long time ago yet people are slaves in various ways and being in debt is one form which I am going to discuss here.

There are numerous disadvantages to borrowing money and being in debt and the main ones are;

1.When you use credit to make a purchase, you are spending more money on that purchase than the person who buys with their own money. In the long run, the difference between what you could have paid for stuff bought with your own money and what you actually paid for them with the interest added is quite substantial.

2.Being in debt limits your options in life! Someone with cash in the bank is able to travel to another town in search of work or has money invest or to purchase a household appliance which breaks down.

3.Being unable to meet the minimum payments required will affect your credit score or credit rating and credit card companies are likely to change the status of your card which will mean they charge you a higher interest rate in future.

4.Being stressed out over your debts can create health problems.

5.When you are in debt, you are setting a bad advantage to your children who then think that buying on credit and being in debt is normal.

The bottom line is “If you don’t have the money don’t buy it.” The crunch always comes when you have to pay the money back and for a lot of people that crunch comes with a life changing event such as a job loss, divorce, or death of a family member.

www.robertastewart.com