The possible Downsides of Taking out Loans and Borrowing

There is only one downside to taking out loans and borrowing money but it is heavy enough that it outweighs any and all upsides. When you take out a loan or borrow money you end up owing somebody. Not only do you owe them the money you borrowed, you also owe them the interest and any other fees they want to charge you.

I understand that it is hard to buy things like cars and houses without taking out a loan or borrowing from somebody. Everyone needs some place to live and a way to get around but there are also a lot of things people don’t need. People don’t absolutely need iPods, computers, television, and other such toys.

If it is not necessary but you still want it, save your money and buy it with cash. By cash I mean anything but credit. You will save yourself the hassle of paying a credit card bill and about ten to twenty percent of the cost of what you are buying. Also, whatever you are buying might be cheaper or a better model for the same price could come out while you are saving.

Some people have serious issues when it comes to saving money. I am a college student with rent, car payment, insurance, groceries, and school to pay for and I can afford to go to Germany for a month this Summer because I saved up the money for it. It wasn’t hard to save the money either. Every time I wanted to buy something I didn’t need, I would ask myself if it was worth not going to Germany. The answer was always no.

I could have paid for the trip with my credit card but I didn’t. Here is how I saw it. I could either go without things I want now to be able to go to Germany this Summer or go without them after the trip and pay about twenty percent more. Which idea seems better to you?