Lots of people are tempted to go into debt, because they can get a variety of goods right now, without the need to save and collect money to buy these items.
What the public does not realize and does not care about is that by being in debt they are required to pay for the goods more expensive than buying them in cash. Shop and spend money below your ability to earn!
You Get Trapped in Interest that Requires Higher Pay
Debts such as credit cards make it easier for you to shop for goods and necessities without cash.
The commitment that you must invest in debt is a must to pay the interest expense that was set at the beginning of the debt agreement.
This means that the higher the interest rate, the greater the money that must be paid. The longer you delay payment, the higher your future debt burden and the money that needs to be paid.
Debt Will Drain Your Earnings in the Future
The reason banks provide a minimum income requirement for applying for a credit card is to assess your ability to pay debts from existing income.
Usually, an income of Rp 3 million per month can already get credit card facilities at various banks.
If you still apply for a credit card with the amount of income above, that means you are just draining the income that will be earned in the future.
Because there are installments or bills that you pay every month because of the use of credit cards. Remember, these bills include interest costs that make your debt higher.
Debt Makes You Pay More Than You Should Have
No bank is willing to give you a loan, without the interest they get.
This interest is what makes you have to pay for goods purchased higher than the price they should.
Interest expense will not be felt if you are willing to pay for various items purchased in cash.
It’s better to save your money and if you have collected it, then you can buy the item in cash.
Or you can also set aside money on investment instruments such as Good Finance which offer a rate of return starting at 18% effective interest per year.
You don’t need a large amount of capital to invest in Good Finance, because you only need to set aside an income of Rp 100,000.
If the invested funds have grown, then this is the right time to buy the goods that you already want.
This way is better than debt, right?
Debt Limits Yourself to Do Other Things
With the debt that you have means the smaller income you can spend on various other things.
You will also find it increasingly difficult to set aside money for vacation funds, it is difficult to set aside money to save and invest, and make it difficult for you to save children’s education costs.
The more debt you collect, the less amount you can spend on other things.
You, Will, Have Difficulty Buying a Home
All credit or debt owed by the bank will be considered when you will apply for a mortgage.
If your debt is already too high, it is very likely that you will be refused by the bank to apply for a home loan.
Want to continue to live in a rental house?
Debt Can Stress You
The debt that you have will cause a feeling of worry about how to pay off payments and interest costs that continue to multiply when delayed payment.
Stress can easily approach people who have debts. Even a survey conducted by the Associated Press and AOL revealed that debt can cause more serious illness, heart attack.