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“Dream big! Fulfill all your aspirations. Travel. Buy fancy gadgets and live an enviable life. Enjoy and pay later.” – Everyone 

Sounds too good to be true, because it likely is the case. A growing number of millennials are living out their dreams through debt rather than investments, and this can bring more trouble than joy to their lives in the long run. 

Do you use the route of debt solutions for your needs without evaluating the expense and repayment resources? I’m not saying don’t have aspirations. All I’m saying is set out to fulfill them smartly. Get inspired by Ganesh, the God of Wisdom, and achieve your dreams prudently!

Three reasons you shouldn’t indulge in (bad) debt are:

Debt is expensive :

When you take a personal loan for holidays or large purchases, it is without collateral as in a home or car loans. Interest rates for personal loans are usually high ranging from 12% and upwards (the bank agent will ensure they tell you that you’re getting “a special interest rate, just for you.” ). You may feel good momentarily but the loan will take a bite from your regular income and hurt your finances as you repay it over the course of the coming months.

Paying for travel through debt can be depressing:

See the world and make memories, every woman’s dream. However, travelling on debt has a catch. When you make a financial goal and invest in a holiday, you principally plan for the expenses and know how much you can spend. But to have an amount that you have not carefully allotted can lead to splurging. There is the loan to repay after you return, which can take away from the joy of the experience.

Big-ticket spends:

Giving in to an impulse purchase of an expensive item essentially means living a lifestyle you cannot afford. Sales are attractive, and so are credit payment systems that are bundled into the buying experience. Availability of ready credit erodes discretion from wise spending. 

The good old axiom of ‘save and then spend’ always holds true. So does knowing your wants from your needs (at the risk of sounding cliched). Debt is helpful, even needed at times to see us through some well thought out big-ticket purchases. The key is the discretion you should exercise. 

Even Ganpati had his stomach burst after he ate too many modaks and needed Nagraj (snake) to tie it up. Learn from his errors and use credit wisely; else you may need more than divine intervention.

Wishing you all a happy and financially healthy Ganesh Chaturthi!

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