Debt free life is a great life and it is ideally good to avoid debt at all costs. The concern here is, can debt work to your advantage? Can debt contribute positively to your life? A loan can be taken for anything, be either taking a vacation, spoiling yourself with luxurious things, renovating, starting a business or paying study fees. If you can manage to pay back the loan does that make it good debt? Not necessarily so. Do not get excited by getting a huge lump sum before thinking through about the consequences, it can either make you a slave or open doors to financial freedom. Below are some of the tips of making debt work or you.

1. Have a purpose

Have a serious honest thought about the purpose of borrowing money and if you are capable of handling the repayments. Is the purpose for buying Brazilian hair or be seen with the latest iPhone? Is the borrowing going to improve your financial strains in the long run or is it going to add to the stress? This introspection will make it clear as to whether you really need it or not. Do it for a stress-free repayment and an exciting feeling of the outcome of what the money will do for you. Honesty, self- control and discipline. This is considered to be one of the best tip for making debt work or you.

2. Monitor interest rates
This is another important tip, be clear how much it’s going to cost you to pay back, shop around and compare the interest rates from different financial institutions. Learn and develop a skill that will help you make great financial decisions. If you have extra cash over the months make a habit of paying a little more towards your repayment and ask about re-calculations on your existing debt as you pay over the months for an even lower interest.

3. Transform debt into investment

It is important to consider transforming debt into an investment that will work for you. If you make a business loan be sure you dedicate your time and you are passionate about it and that your goal is to transform that loan from a debt into a profitable business. Before you take out that loan go back to the purpose issue and ask yourself if your business plan is good in black & white only or not. Go back to your SWOT analysis and make it work.

4. Is it good debt or a bad one?

Buy a house or property that will generate income not one that will be a liability. Bear in mind that a house/property is only an investment if it doesn’t cost you money. I have come to realize this one is a sensitive issue because people don’t like the bitter truth. Don’t misunderstand me here, note that I say not all debt is the same. A good debt? YES but make wise decisions so you can change your financial life. That bond for your house is another form of good debt but not necessarily an investment for many of us as it never really generate income. It is wise to weigh the pro and cons on your journey to making debt work or you.

Most people still believe that just having a house is an investment, is it really? Or is it just a good debt?  If you believe it is, are you referring to the money you get whenever you might decide to sell it because its value has increased? Is that not the same money that is usually never invested but is used to buy more expensive bigger house? That bigger house requires you to spend more on everything on it to get it running normal. More on furniture, electricity bill, higher bond, rates & maintenance of it. Are all this putting money back into your pockets or draining it more? Where is the investment in that? Note that good debt can be used to create wealth, make smarter financial decisions by knowing that it can actually make you money. Take a seat, relax your mind and think again and again.

Summarizing

We unfortunately live in the world whereby if you are not wealthy then you are made to need debt to have a good financial record/credit score. You get into more debt because you have another debt that you manage to pay it well so you can get into more debt.

• Learn the lessons or differences of good debt and bad debt
• If it causes you bad debt look for other ways
• Never stop looking for opportunities meaning stay prepared
• Keep up with your payments and make sure it doesn’t get out of control
• Make a budget and keep to it. Related topics https://womenissues.co.za/how-healthy-is-your-relationship-with-your-finances/
• basically saying good or bad debt is so to help with the management of it for a stress-free life but the reality is, debt on its own is bad. It is a way of life for most of us to get through but a recipe for disaster as we actually spend what we don’t have therefore making us slaves.

Debt is slavery dressed smart, think smarter & act smarter