Certainly each of you knows someone who regularly lends money. It does not matter whether they are bank loans or from family and friends. It is about certain trends and getting used to the fact that living on credit is now a normal phenomenon. It is difficult to say where this lifestyle comes from. It is not clear whether this is due to a lack of knowledge, a lack of predictability of consequences, or simply to human recklessness. Now let’s think together…
Is every credit bad?
Of course, not every loan is bad. The phrase ‘living on credit’ is, in a sense, a simplification of reality. I myself own a mortgage and I think there is nothing wrong with that. Unfortunately, nowadays few young people can afford to buy their own flat for cash. Support has become a necessity. In addition, it should be mentioned that owning a flat is a very important need, so a mortgage is by definition not bad – of course, if you do not take it to the maximum. Then too high an instalment can lead to many problems. Besides, what not to say, mortgage credit is relatively safe and therefore cheap.
The worst are all kinds of “momentary loans”. The interest rate on such products is very high and, unfortunately, they may soon lead to bankruptcy or to a debt loop. So take credits, but do it with your head.
When does borrowing become dangerous?
The simplest thing to say is that borrowing becomes dangerous when we lose control of it. But what is this control? We certainly lose control at a time when we need to take another one to repay the loan, but this is already a higher stage. In my opinion, the problem and the danger begin at a time when we want to lend money to our desires. When we lend money for a new car, holidays, etc., we do so. I am not talking about consumer instalments or leases, which can be beneficial or very beneficial in certain situations. Of course, many people may say that my point of view is very conservative, but I am taught that at the moment when I cannot afford something, it gives up such a pleasure until I manage to put off a certain amount. I encourage everyone to do the same at 😊
Of course, there is nothing wrong with borrowing money if we do not have the money at the moment, i.e. I am in the process of selling the apartment, we expect to pay the salary, and so on. However, we need to distinguish between situations in which I need money for today – I will get an influence of 100% for a month from a case in which I borrow first because I need it, and then I will think about how to earn money…
Such thinking is a very good recipe for spectacular failure…
What are the consequences of living on credit?
It may seem that life on credit has no consequences. We borrow money, buy what we want, go on holiday. We do not have to wait for all this, we have it here and now. Why worry about what will happen if you can live a moment?
Once a wise man told me that some things are planned in case something goes wrong. This is also the case with living on credit. At a time when everything is going very well, living on credit may have no consequences. Worse still, when something becomes proverbial… Then big problems begin… It is worth to be aware that such problems usually concern not individuals, but whole families. That’s why it’s worth building savings for the black hour.
Living on credit also has some negative, not strictly financial consequences. A person accustomed to having “everything” very quickly gets used to luxury and it is becoming more and more difficult for him to give up some kind of pleasure. Such an approach can also have an impact on human relations.
Unfortunately, it’s not always colorful and it can also happen that something goes wrong. Illness or loss of job can destroy the pyramid of life from 10th to 10th of the following month. Commitments have to be paid, and if there are no funds available, then you have to sell something…
Unfortunately, in extreme cases it is a straight road to the street…
How do I behave if I am surrounded by such a person?
Having a person living on credit in his or her environment certainly cannot underestimate this subject. Sooner or later you may be directly affected by the topic. Yes, one can say “his life – his cause”, but one must be aware that you may have to pay the debts of such a man yourself, in order to help him avoid even “debt collectors”. Certainly, it is necessary to educate, make aware and talk about the negative consequences of debt here all the time. You cannot lend indefinitely to such a person either, unless you want to be a sponsor, but that is another subject.
We hope you like the entry about what life looks like or can look like on credit. If you have any suggestions, questions or something to add, we invite you to comment