Friday, 2 August 2013

Being Responsible Borrowers

The Debate on Personal Debt Financing

The debate on personal debt financing just doesn't seem to end as there is a growing concern as to whether borrowing is really such a good. In my opinion, it really depends on how you look at it you know because you see dept financing has its brighter sides as well as its bad side effects. To be honest with you, this Advice Blog doesn't offer expertise advice on economics but the reason why this topic was chosen is because this topics affects all of us. Everybody borrows for whatever reason if you come to think of it whether it is seemingly justifies or not. But lets just briefly understand why people borrow anyway. Here is some good advice folks, don't borrow if it isn't worth it.

Borrowing to finance Personal Expenditure

Everybody is going to borrow money whether its from a bank or from a friend or from a relative. But why do people borrow anyway? Here are some reasons why people.

1. Consumption; Yes, everybody has a dream of one day owning their own dream vehicle driving it down town at over 100 km/h. If you are a family person you want to own a house one day and never have to worry about paying for rent and fearing that you may get kicked out of your own home. Its obvious that not everybody comes from a rich background and saving money until retirement just doesn't feel real. So people borrow to satisfy their immediate needs, wants and dreams. In my opinion you can't really blame them for doing that now can you?

2. Investment; People borrow in order to invest money that can in turn earn more money and in turn make more money. The math is simple, people these days want to see their money grow through businesses or through acquiring assets.

3. Emergency; People borrow money because they may be passing through a crisis in their home or lives that the amount of savings they already have to cover their problems just isn't enough. Borrowing money in such cases surely helps curb such a problem sometimes.

Responsible borrowing is always needed

Here's some good advice to you folks, in my opinion borrowing is not bad as long as it is responsible borrowing. If you are going to borrow money knowing at the back of your head that you are not going to pay it back, then its wrong. Maybe this good advice should be listed...Follow this good advice tips below;

Borrowing is bad if you know full well that you are not going to pay it back
Borrowing is bad if you are trying to finance a lavish lifestyle which you are well aware you cant really afford
Borrowing is bad if all it ever do is add to your own anxieties

Ofcourse there are times when you just need to borrow money to cover something that is worth it. Here is some good advice for you, live within your means. 


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