Borrowing loans is a huge financial decision but is part and parcel of daily life. It’s actually not a bad idea to get a loan. What makes it bad is what you want to finance with the money. People borrow for varied reasons, some of them not valid at all.
Here is a list of things you should never finance with borrowed money.
1. Don’t Borrow for a Wedding
They say a wedding is your big day that will only happen once in your lifetime. But this alone doesn’t justify the need to be too extravagance to the extent of getting a loan to finance it.
They’re some people who borrowed money to finance a grand wedding only to end up with a divorce few months after the wedding.
When this happens, you’re not only left with a broken heart but serious debts to settle. Think about how you’re going to survive as a family after incurring huge loans to impress your guests.
2. Never Borrow for a Vacation
It’s expensive to finance your dream vacation, and you might need some extra cash to make it memorable. This is not a good idea because you still have your whole life ahead of you to save for that dream vacation.
You can still have a wonderful summer vacation somewhere simple with your family and still enjoy yourselves. Holiday loans can put you into a huge debt strap because it’s a short term loan and might not repay within the period stated.
3. Don’t Borrow to Buy a Phone
So you just saw a beautiful smartphone, but it’s too expensive for you, don’t borrow to buy it. If you can’t afford that phone, then continue using the one you have until you accumulate enough money to afford it.
If you borrow and can’t pay back the money, you might find yourself reselling the phone to pay the debt. Even so, you won’t sell it the same amount you bought it, which will be a huge loss on your side.
4. Never Borrow to Gamble
Gambling addicts often find themselves between a rock and a hard place when they borrow money to bet only to end up losing. Winning a bet is a matter of mere luck; hence there is no guarantee that you’re going to win back the borrowed money.
Betting is supposed to be a fun experience and not something that puts you through debts. In fact, you should never bet with more than you can afford to lose.
5. Don’t Borrow to Furnish Your Apartment
So you just landed your first job and got a wonderful apartment. But you’re yet to receive your first salary, and the house looks so empty.
Many people think of taking a short time loan to furnish the apartment as they wait for the payday. This is another wrong financial decision you should never make in your life.
It’s not wise to borrow spend on luxury or things that will not generate any finances. You only need to borrow money for two reasons: to generate more income from it or meet pressing needs such as medical bills. Proper financial management is crucial, so you don’t end up borrowing every time you need to do something.