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Living a Credit Free Life

As weird as it may seem, especially in today’s fast paced credit laden world, living a credit free life is a distant dream for many.

When it comes to finances, having a Loan/Credit is surely the In-thing.

Out of all that I have known, friends and family, barring a few that I can count on my fingertips, everyone seems to be living a life in debt.

Not a day goes by (damn weekends included) that one does not receive a call from either the Bank that one deals with or any other Financial Institution.

Right from throwing at us alluring Loans with attractive interest rates to increasing the credit card limit to offering even the overdraft limits to Buy-Now-Pay-Later, these Financial Institutions have got it all covered.

And the offers are quite tempting to say the least.

All they yearn for us to do is say a ‘Yes’ to any of them. Even if one needs it or not.

While by no means do I out rightly claim that it's unwise to be in debt, living a credit free life has many advantages which we are about to see in the next 2 minutes.

Is Debt Evil?

‘A Bank is a place that will lend you money if you can prove that you don’t need it’- Bob Hope

For few it is a savior, for most it is a way of life.

Would urge you to read the above statement again.

Notice ‘few’ being used against ‘savior’ and ‘most’ being used against ‘a way of life’.

I have personally known friends who are neck deep in debt and are only a step away from disaster.

Sadly, though, it has become a way of getting one’s wants fulfilled.

While one cannot argue with someone who is in dire need of credit for medical treatment or any other emergency that one encounters, the million-dollar question that needs to be addressed is this, is it a need or a want?

When one can easily get the latest gadget financed, why not have it against a loan by paying an EMI.

If an exotic vacation can be financed via a personal loan, it is too much of a tempt to say a no to.

Same can be said about the temptation to purchase a Home, a car, or the latest smartphone.

Who Gets Rich in this Game?

‘A lot of people go into debt just to keep up with those who already are’.

Pondering over this question, in all likelihood it is the Financial Institution offering a loan that gets rich.

Let me explain how.

Let’s say for example one purchases a Personal Loan to fund the latest gizmo.

Consider the details as under:

Loan Amount

 ₹ 100,000

Interest Rate

15%

Tenure

5 years

 The EMI for the same comes out to be ₹2,379.

In effect, one would be paying a little over ₹1.42 Lacs in total against a loan of ₹1 Lac. In simple terms, that is 42K as interest.

You can imagine who gets the rich if one avails a loan.

Secondly, the moment the latest gadget comes at your doorstep and gets unpacked, there you go it loses its value. It depreciates in value by several notches.

What Is The Way Out?

While I by no means subscribe to the thought of not enjoying the pleasure of not using the ultra-modern gadget or purchasing the latest iphone or going on an exotic vacation, there is a better way to fund any one or all of these.

One can simply save for it.

Instead of giving in to the desire of funding a vacation/purchasing a gizmo at this very moment, we can simply delay the desire by a year or 2 and save for it.

Once the desired amount is reached, go for it and sink in the pleasures of the craving.

What Does It Take To Live A Credit Free Life

‘Happy is the Man without sickness, Rich is the man with no debt’ – Proverb

I may sound like a disaster for the economy but only I am responsible for my Finances and I refuse to let anyone make money while I take debt.

To each his/her own.

I am convinced that we hardly need debt to survive or live our lives.

I choose the positive compounding and not the negative one (Debt).

Living a credit free life boils down to a mindset that one carries.

Moreover, it takes a lot of sacrifice and discipline. On the flipside, the peace of mind is priceless.

One can go to bed not worrying the debt and how one is going to pay it back.

Saying no is the key while enjoying little things in life.

It is a different kind of contentment to know that not a dime of one money is spent in paying any interest to any Financial Institution.

I am perfectly fine with driving an old car, using the phone for one more year, delaying an expensive vacation just to appear fancy on social media.

The new gizmos can wait, exotic vacations can be postponed for a year or 2, instead of purchasing the iphone 13, would it not be wiser choice to go for iphone 11 or say 12.

The choice is ours.

Wishing you a credit free life.

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