the borrower is slave to the lender (Proverbs 22:7)
I've read this enough times and understand this to avoid this. But still, in over a period of 8 years, I've accumulated over $20K in credit card debt alone. For the past three years, I'm trying various ways to cut down my debt, but all those steps have only helped me to avoid accumulating more debt, but did not help me reduce.
There are several lies and myths around debt. I think when lies are repeated again and again with a louder voice it sounds to be true. I think the three biggest lie(s) among all this is
Up until 2000, cards were allowed only to the elite class and the only card available until then was credit cards, it was kind of a Luxury item. It was in 2003, when cards were making entry into India in a big scale. ATM and(or) Debit cards to almost everyone who had a bank account and Credit Card to almost everyone who had a Job.
Growing up seeing my dad pay cash for everything, I decided I'll pay cash for everything when I got my first job back in 2003. This is where banks started playing their first game. "Your Salary will be direct deposited and you can access your money thought the ATM card or withdraw cash at bank. This is more secure and you can access your money everywhere." Great. Got the ATM card. Used it exactly as I planned, withdraw cash as needed and PAID in CASH.
When I got into my next Job in 2004 with Wipro, banks stepped up their game and came with the next weapon. "Your Salary will be direct deposited and you can access your money thought the Debit card or withdraw cash at bank. Also you do not need to withdraw cash for purchase who accept VISA. This is more secure and you can access your money everywhere." Great. Got the Debit card. I tried to use it exactly as I planned, but it started to make me spend a little more than I planned for.
Earlier I used to withdraw Rs.500 before I go to a shop and I end up shopping only for Rs.500 or less. If I shop more, I used to prioritize and pay for those which I could buy within that Rs.500. I had to leave the rest right at the shop and walkaway. I might plan to buy them later but not right then.
I've read this enough times and understand this to avoid this. But still, in over a period of 8 years, I've accumulated over $20K in credit card debt alone. For the past three years, I'm trying various ways to cut down my debt, but all those steps have only helped me to avoid accumulating more debt, but did not help me reduce.
There are several lies and myths around debt. I think when lies are repeated again and again with a louder voice it sounds to be true. I think the three biggest lie(s) among all this is
- Debt is Good (Good Debt vs Bad Debt)
- Debt is a modern instrument to prosperity.
- You cannot live without Debt.
Up until 2000, cards were allowed only to the elite class and the only card available until then was credit cards, it was kind of a Luxury item. It was in 2003, when cards were making entry into India in a big scale. ATM and(or) Debit cards to almost everyone who had a bank account and Credit Card to almost everyone who had a Job.
Growing up seeing my dad pay cash for everything, I decided I'll pay cash for everything when I got my first job back in 2003. This is where banks started playing their first game. "Your Salary will be direct deposited and you can access your money thought the ATM card or withdraw cash at bank. This is more secure and you can access your money everywhere." Great. Got the ATM card. Used it exactly as I planned, withdraw cash as needed and PAID in CASH.
When I got into my next Job in 2004 with Wipro, banks stepped up their game and came with the next weapon. "Your Salary will be direct deposited and you can access your money thought the Debit card or withdraw cash at bank. Also you do not need to withdraw cash for purchase who accept VISA. This is more secure and you can access your money everywhere." Great. Got the Debit card. I tried to use it exactly as I planned, but it started to make me spend a little more than I planned for.
Earlier I used to withdraw Rs.500 before I go to a shop and I end up shopping only for Rs.500 or less. If I shop more, I used to prioritize and pay for those which I could buy within that Rs.500. I had to leave the rest right at the shop and walkaway. I might plan to buy them later but not right then.
But with a debit card, if the bill comes to Rs.635, I would go ahead and swipe it. I WENT OVER MY BUDGET BY Rs.135. This is the humble beginning.
To be continued....
(Note: There is a reason, why I write this blog and started this series. I'll reveal after the introductory parts get over. For now, there will be one post every week. Please subscribe and share this with your friends, if you find this useful and(or) interesting)
Beautifully written post!! A fresh perspective about the topic.. Come on with the next part....
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