Are We Slaves To Debt?
December 13, 2006 9:00am CST
Why are we slaves to debt? Do we desire what others have, even though we can’t afford it? Or are we just plain gullible or greedy. What is wrong with waiting until you have saved up enough to buy the things you want for cash, and be debt free? Will we not have more peace of mind and less money worries? Will we not have fewer arguments with our spouses about money? And what about divorce? Many couples break up because of money problems. I know you have to make debt to own your own home. But that is also an investment that appreciates greatly over time. Property is a lifetime investment and security. So that is a necessity. An automobile is always a must in modern day living. But why do we have to buy a brand new one that cost us 100s of thousands of Dollars. Why can’t you save up and buy it cash or a less expensive used model on affordable terms. I think society in general is slaves to debt. They want what they cannot afford. And they want to show the Jones’s that we can also have what you have, and maybe better, although we are going to pay for it with much worry and stress. If we look at the USA’s population’s National debt, we can clearly see a nation that is over-indebted to a worrying degree. In South Africa we have the same problem. As a result our interest rates have increased four times over the last six months, in order to curb credit extensions to people who cannot afford it. What is your take on this? Are you also caught up in this debt trap? How will you get out of it/ and don’t you desire to be debt free? What’s your take on this?
18 Dec 06
Always pay yourself first. In order word, make it a habit to save at least 10% of your monthly salary. Many peoples are in debt because they never budget their expenses and allocate their salary with saving as their main priority. Property is no doubt a good source of investment provided if you choose the right location. Unit Trust (or in some country, it is called the mutual fund) offers a much more affordable force-saving packages. We need to account in the inflation rate also. Our investment or saving tools must be able to offer a return much higher than the inflation rate so that our wealth is growing.
• South Africa
18 Dec 06
Correct, I agree, we have to learn to cultivate saving money to serve as hedge against infation. Also saving regularly is one way of building emergency funds. Unit Trusts is one way to build up good capital, provided you understand the markets. It's also not a short term savings method, but rather medium to long term.
• United States
13 Dec 06
We are slaves to debt. It's the credit card culture. People see something they want and buy it instantly via credit card and never think about how they will pay it or the interest charged. Often the rates of interest are so high, that you end up paying three times what you originally spent. My tip for avoiding this: when you see an item for say £50 - ask yourself, do I really want to spend £150 on this (which is what would happen if I put it on my credit card). If you don't, wait till you've saved the cash and then buy your item for £50.
• South Africa
18 Dec 06
Debt build up is not only as a result of credit card use. Most people who get into trouble in developing countries are not credit card holders. Hire Purchase is one of their primary debts. Articles like furniture and motor vehicles are some of the items that are repossesed daily due to these agreements not being honoured.