Ever since I was young, I was trained to hate debt.
I was not allowed to borrow anything from anyone.
One day, I brought home a bike which I borrowed from our neighbor.
My mom immediately asked me to return the bike.
“Return the bike!”
“Yes, I will return it tomorrow.”
“No, return it now!”
“I have not used it yet. Why do you want me to return the bike now?”
“What happens if you break it? You will have to pay for a broken bike. What happens if you lose it? You will still have to pay for it even if it means not being able to use it because it’s gone.”
I hated my mom for that, since we cannot afford one, I was even deprived of even enjoying it just for a moment.
Without me knowing it, there she was teaching me the value of waiting.
If I developed the habit of borrowing things when I was young, I would eventually get into the habit of borrowing money. And that would be because I never learned the value of waiting for the right time.
That is the reason why I discourage people from spending money they don’t have. How can you do that? By borrowing money or using credit credit card. This is just you BUYING the item NOW and PAYING for it LATER.
(Photo from this Link)
I have nothing against you paying in cash unless you do not know where the money will be coming from and you are just going to pay the minimum amount required.
If you want to get into debt, get into good debt.
Good debt is something you borrowed with an intent to profit.
You borrowed at 5% per month and earn 30% from a sale transaction.
You pay off the 5% but still earn 25%, that is what is considered as good debt.
If you have the cash for whatever it is that you want to buy, go and make the purchase. But if you don’t have the funds just yet, then don’t buy it.
(Photo from this Link)
Always spend in cash so that you can make sure that you don’t overspend and go over your budget.
LIVE TO SPEND IN CASH – Avoid Getting Into Bad Debt
“Develop the habit of SAVING not BORROWING.”
-Chinkee Tan, Top Motivational Speaker Philippines
THINK. REFLECT. APPLY.
- Do you have the tendency to pay in cash or charge your expenses more often?
- How do you feel when you charge it?