Bad debt

Bad debt

 

Christmas

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It’s no surprise, we know it’s coming every year. Christmas has become so commercialised that the essence of the day is overlooked. It’s retailers opportunity to maximise there profit by making you believe you need it or your child must have it. Plan ahead, are there certain things you can get during Christmas sales the previous year.

Holiday/ Vacation

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Holidays help us disconnect from the daily grind of life, relax and reenergise ourselves physically and mentally. Thoughts of how to pay back  debt may be at the back of your head while on holiday in that case it defeats the purpose of being on holiday. On the other hand it may not even cross you mind until you return and reality hits, how you are going to payback the debt? The holiday glow is quickly replaced by stress and worry, it doesn’t even feel like you went away. The holiday may have come to an end but the debt just won’t go away until paid.

Wedding

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Many a bride and groom have resorted to paying for their wedding using loans and credit cards some to their regret. Enticed by the latest trends and must haves,  you are in debt to finance your fairy tale and lavish wedding just for a day. But how long will it take to pay it off in marriage? Will this put a strain in your relationship?  A wedding is an event for a day marriage is for a life time.  Focus has shifted materialism and keeping up with the Jones’s instead of the union of two people.

Latest electrical gadgets or appliances

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ipads, iPhones, iPods and other manner of i-ness about, smart TVs, 3-D tv we’ve been led to believe we need them. If you can afford that is your choice. However getting into debt for these items is unwise. Just as you get the latest gadget, there is another in development awaiting to be released. In reality we don’t even use half the functions in the gadgets we get.

Storecards

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Retail stores provide store cards which are similar to credit cards but with higher interest rates. Can only be used in particular high street chain shops and department stores unlike credit cards which are accepted in all shops. If you can pay the balance in full every time  that is fine. However, if you cannot clear the balance in full at the end of the month, interest charges applied make the item more expensive than the original price tag. If you cannot keep up payments, this not only  will you get penalty charges but it affects your credit score.

Car on finance

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As you leave the car dealership in your brand new car, it starts to loose its value. Which Car estimates that a brand new car looses 50-60% percent of its value in the first 3 years. There is no return on investment with this purchase. Yes you have made a down payment for the car and making monthly repayments but the car doesn’t belong to you and can be taken away real quick it doesn’t matter if you are just a few months shy of completing payments.  Car payments last longer than warranty of the car, if something goes wrong after the warranty, the cost is on you.

 

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