How to avoid unnecessary debt when you have started working

How to reduce financial worries

By Mani Jack M.J. 

Part One

This article is specifically written for the younger generations so that they will be more prepared to face this world as they enter adulthood. M.J.

1. Avoid rat-race

What is rat-race? Rat-race is about everyone who is competing aggressively towards something that they are not sure of , the failure to think of the consequences and how it will affect our financial status. Rat-race is actually created by the RICH ONES trying to lure the middle-income earners and the poor ones into the deadly game. Rat-race happens in many forms. Let me give you a simple example. Let say all of your friends are using the latest i-phone. You also want to have one for the sake of being relevant but your buying power is not the same with your friends. If you choose to buy one, that means you are killing yourself as you might do something that may jeopardize your own life.  This rat-race is basically about our failure to be patient as our burning desire takes over our ability to think rationally as we believe that if we don’t have that particular thing, we will be perceived as outdated. It is okay to entertain our imagination about the things that we always want and dream of but we must know whether we are financially prepared or otherwise. We have to accept that some are born rich while some are born poor. If you are born poor, live like the poor until you are done improving yourself especially your academic qualification and skills.

2. Avoid credit card and loan sharks

Credit card is actually meant for those who have self-discipline. If those who don’t have discipline have a credit card, he or she will end up having more credit cards which will cause him or her to be trapped in a huge debt. This huge debt will cause him or her to go for loan sharks which will multiply every debt that he or she has. Due to these debts, every day will be a nightmare as they will be haunted by non-stop calls from the banks and money lenders. In other words, he or she will live like a fugitive. Therefore, before you think of having a credit card, please ask this question to yourself. Do I have self-discipline with money? If the answer is NO, please stay very far away from credit card.  

3. Learn to be patient

Everyone loves shopping. However, it can turn out to be a disaster if shopping becomes a therapy to ease our mood. As it turns out to be a destructive habit, we will end up having very little to spend for other important matters. Everybody has something on their mind about things that they want to buy. Saving 5% of the monthly income could be the best solution to buy the desired item instead of swiping your credit card. The art of being patient is not an easy subject to master because we are surrounded by the material world which are extremely very seductive as they know exactly every part of our desire. Fishing could be one of the ways to teach us about being patient. Playing musical equipment could also be very effective in preventing us from spending money blindly. Gardening will keep our minds busy as we will not think too much about shopping. Do more outdoor activities which add more values to your lives instead of spending too much time and money on shopping. If your friend is driving the new Honda, you can buy a good second-hand car. You can buy your dream car later perhaps when you are 35 years old.

4. Know yourself and educate yourself FIRST.

You must know everything about yourself. Comparing yourself to others will add more burdens to your mind. If you are a student, forcing your parents to buy things that you want will give more financial burdens to your parents as they will have to find more ways to make more money instead of find more time to spend with you. Wait for your turn. Focus on your priorities as a student first. If you have started working, focus on financial intelligence first especially if you are 24 years until 30 years old. Learn about investment portfolios first. Learn about stock, fund, fixed deposit, properties and compound interest. Then, study your paycheck. Decide how much you are willing to invest monthly. The earlier the better. Financial mistakes are everywhere around you for you to reflect on. Do not repeat those mistakes. LEARN FROM THEIR MISTAKES. When you start young, you will enjoy the fruits later. Good luck.

“This world always favours the ones who are prepared.” M.J

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unexpected-debt-traps-and-how-to-avoid-them

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