In today’s credit card culture, this question may seem absurd. Individuals, business houses, industries and Government – practically the life of every activity in this world seems to run on credits and debits, with a generous doze of borrowed money.
When the balance between borrowing and repayment gets skewed beyond a degree, the system of credits and debits crumble and the damage it does to the money flow is too heavy. This is what the sub-prime crisis at US taught us.
Why does the life of most of us turn to be dependent on borrowed money? Let us ignore the cases where poverty is the prime cause. Where poverty is not there, where the basic human needs of food, clothing and shelter are adequately met, why do people still lead lives with borrowed money?
What makes people go on a borrowing spree?
The reasons are many, but the predominant cause can be traced to comparing ourselves with peers and with those who are at higher social status than us.
The next cause is the tendency to show off. Third reason is unbridled greed to “enjoy” life to “the fullest” with a mad belief that living a life of satiating sensual desires by hook or crook is the goal of life.
The next reason is to lead a life without any inner development, to lead a life in tune with the rest of the mass in the world, with no conscious self-analysis about what one really and essentially needs or does not need for a happy and peaceful existence in this world.
Result? People spend money more and more on things that they may have no need, on things that are simply far beyond their true financial status, on things that are going to give them short term thrills but end them up with long term pain.
Mindset after borrowing money
Living on borrowed money initially may not be too burdensome. As one proceeds life in the same way, the burden mounts more and more. Sensitive and self-respecting people feel miserable at some point of their life for leading such a life and they may wake up to the ugly reality of their horrid financial status. They may try to fight out their position by sacrificing their comforts and do everything they could possibly do to wipe out their loans and regain their lost prestige.
Strangely, there are also people who get used to living far above their means on borrowed money and they gradually lose the sense of guilt in leading such a life; beyond a stage, they get immune to pressures, litigations, loss of respect in society and even end up in insolvency but still not feel anything bad about it.
The above, second category of people can not be easily educated on the silent happiness of living a debt-free life.
Living without borrowing – is it possible?
For such of those, who know the perils of living off borrowed money, is it really possible in today’s lifestyle to lead a life without borrowing money, without engaging in deferred payments or without getting into installment payments in personal lives?
Yes. It is possible; but it requires a lateral shift in our lifestyle, personal ethos, beliefs, principles and values.
Why should one think of a debt-free life?
Why should anyone ever think of leading a life without loans? It’s because the innate spirituality in us tells us that a peaceful life is more satisfying in the long run than a life filled with thrills and instant gratification attained beyond our means.
It tells us that a life where you are not answerable to anybody on your financial matters is a life truly blessed; it is a life where a good night’s sleep night after night is assured. The spirituality tells us that a simple life with simple needs is far more wholesome and satisfying in the long run than life filled with grandiose and extravaganza.
Tips for living a debt-free life
1) Don’t compare: Avoid comparing yourself with your peers, colleagues, friends and relatives. Your life is yours. Your lifestyle really need not reflect on some one else’s tastes, preferences and needs. Tell yourself firmly that if at all some people are going to “accept” you in their circle based on their perceived status, you need not really value or respect their company.
2) Know your “don’t wants”: Be very clear on things you do not want in life; on things that are attractive to so many others, but not really attractive or of value to you. Example: If golden or diamond jewelry is least attractive to you and if you consider investing money on them is a waste, why should you ever spend money on them or borrow money to accumulate and hoard them in the bank lockers?
There can be umpteen examples on things that need not be attractive to you, but the society by and large spends lots of money: Holidaying by traveling to exotic destinations, buying the latest model premium car, eating in prestigious restaurants, buying the costliest branded footwear or fashion garments, engaging in hobbies that are very costly to your wallet.
3) Watch your bad habits: Smoking, drinking exotic champagnes, frequent partying with friends and colleagues, restless wandering and traveling, unnecessary eating out when you can eat more healthily at home, excessive drinking of coffee, tea and aerated soft drinks, love for gobbling up junk food and snacks in between meal times, spending on latest electronic gadgets unmindful of their true utility value, giving unwanted gifts to others just to impress them, addiction to shopping spree – there are umpteen such bad habits in us that tempt us to swipe our credit cards at the drop of a hat, without thinking on the evil consequences.
4) Spend in cash – use the credit card to the least:
When we physically touch our hard-earned money and hand it over to somebody else or part with it once for all, we feel a small pinch at our hearts! When you see our money flowing out easily from your wallet, you get worried. You stop to think “Am I overspending? Could I avoid this expenditure?” It is not the case with spending through credit cards.
If you must use your credit card, you must ensure that when the due date of payment arrives, you have adequate money in your bank to pay it in full straight away. Never get tempted to pay “the minimum amount payable now” that the Credit card firm tempts you with.
5) Save money before you buy:
Be it purchase for Christmas, a capital purchase like furniture for your house or a piece of gold jewelry that your wife loves to have, you must first earn that amount and save it. Then spend it and free from any worry.
It would be highly ideal if you can extend this principle to buy more costly purchases like a car. If a car is a must, can you settle for a second hand car which you can purchase straight away from your accumulated savings?
6) Simplify life:
Walk if you can bicycle. Go by bicycle if you can avoid a motor bike. Go by a motor bike if you can avoid a car. Go by railroad instead of taking a flight if the distance permits. Have just one TV for the family instead of one per living room. Have just one car for the family. Have just one credit card for the family. Live in a rented house instead of buying your own house and then getting burdened by a huge home loan which cannot be serviced easily with your present income.
All said and done, we are all social creatures and we get easily disturbed by what the society thinks about us or what we imagine the society thinking about us! Living a highly simplified life may appear too difficult and infra-dig for many of us. But if we are gritty and determined, we can not only live a life free of worries about debts, we can also truly enjoy by personal experience the hidden joy behind simple living.