To Borrow and Borrow is Such Sweet Sorrow

Loan ApplicationThose who suffer from financial problems often have one thing in common: they borrow money to borrow more.

For example: using a credit card to buy a new flat screen television. While there’s nothing wrong with buying a new entertainment system using your credit card, problems arise when you use the card and can’t pay it off in full each month because you have exceeded your credit limit.

There’s nothing wrong with borrowing money. In fact, smart borrowing can help you save loads on other finances. But if you overdo it, you’ll fall victim to the endless borrowing cycle.

Borrow to Borrow for Lifetime Experiences?

Getting a loan for depreciating assets like cars is not the wisest decision. Apart from increasing your risk for debt, you don’t get much in return for your personal finances. Since most assets depreciate eventually in the future, what about borrowing money for once-in-a-lifetime experiences?

Good experiences (e.g. luxury cruise) may appreciate over time. But if you borrow money, make sure that your good memories appreciate faster than your debt.

Never Borrow More

It doesn’t matter if you’re buying assets, luxury items or experiences on debt. If you can’t pay the down payment or following interest, then don’t borrow. It’s simple: if you can’t afford it, never risk it.

It’s tempting to buy things on credit because you think you can pay for it in the end. That’s not the case for everyone. Your bank account might fall short of the item that you want. Before you buy, think it over twice and ask yourself: can I afford this or not?

Also, if you’ve already borrowed money, don’t borrow more. It’s a financial trap that leads you to more debt.

Borrowing more is never the solution. If you don’t want to be on the receiving end of an unpleasant bill, it’s best to be a smart borrower now than regret later.