How long can you keep swimming in bad debt?

There will always be one thing that steals from your future plans and freedom and that is bad debt. Credit cards, personal loans, payday loans, car loans and buy now pay later schemes.

Let’s be real most of us have taken one of these types of loans in the past or are currently paying one off as we speak. At the time it may seem like a good idea.

In reality it means you are a slave for that purchase until it’s paid off.

It might not seem like a big deal with one item but this habit leads to financing more and more things because we don’t feel the immediate hit as compared to paying with cash.

The most popular type of debt people get into is car loans.

I won’t generalise but 34% of adults in the UK have either no savings, or less than £1,000 in their savings. It’s safe to say a new car purchase costing between £12,000 to £17,000 will have to be put on finance by default.

Even if a person had the money saved it’s less painful to drive away knowing you’ll spread the cost plus interest over 5 years than handing that cash minus interest over today.

By the way a new car loses 30% of its value within the first year.

Some people go down the credit card trap and are not able to pay off the balance each month. They’ll settle with making the minimum payments and end up paying interest on the interest added to the balance.

I won’t lie I’ve used credit cards in the past for survival and enjoyment. Sometimes this was to supplement my low income. All in all i suffered twice as much because of the interest.

Ideally I should’ve just budgeted and lived to my means.

All debts incur interest, this is the cost of you borrowing the money from the lender and it varies depending on what you agreed at the time you signed up.

To avoid all this debt drama just don’t sign up for anything you can’t afford to pay cash for today.

The world will always have clever ways to make you think you need something right now.

Believe me when I say it’s worth waiting and using your own money that you’ve rightfully earned.

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