Having a sense of money is fundamental to being successful in life. When an entrepreneur chooses to move to the next level, it is imperative that he consider the things that can hinder his progress in business. Among the things that can make or break a business is taking out loans. People take loans to meet their expectations. However, it takes a smart entrepreneur to figure out when or when not to take a loan. Loans can do wonderful things for you when managed properly. It can help solve urgent problems, meet substantial expenses, and grow businesses. Although the loans can work perfectly for those who have a stable income, they have a propensity to entangle those who are struggling to make ends meet. It is very important for every entrepreneur to keep in mind that a poorly managed loan is hell. Credit quickly becomes a source of frustration and can do real damage to someone’s future financial prospects.
This current generation is a credit-bound generation. It is a cultured loan generation! Countries go into debt to finance projects, creating enormous damage to their economy, while individuals, companies, organizations, etc. they go into the very act of borrowing or taking a loan to make ends meet. In addition to emergency expenses, moving costs, buying appliances, car financing, wedding expenses, home remodeling, etc., people take out loans to consolidate debt. Whatever the reason for borrowing, the loan helps and confuses.
One of the dangers associated with taking out a loan is its strangling nature. You may be surprised if you don’t have your principal to exceed the loan. It’s worth taking out a loan just to increase your equity base or to make a lot more money than the original loan.
Loans can be obtained on the basis of certain terms of agreement between the lender and the borrower, and can come in two forms: secured and unsecured loans. Secured loans require collateral, which could be in the form of property, lien, or lien if the borrower defaults. Unsecured loans don’t require anything as collateral, but they usually do require a higher credit score. If a borrower defaults on an unsecured loan, there is a risk of being sued or the lender or bank filing a lawsuit against the borrower.
Money is good, very hard to earn but very easy to spend. Our lifestyles more often than not help drive us into a tighter corner. We live so extravagantly that our daily/monthly income cannot be enough. Having an attitude problem is one thing, and coming up with a way to solve it is another. Some of us are ready to make some lifestyle adjustments, drop some money habits that are toxic to our growth, and take certain steps that will help us break out of this cycle.
Growing up, I never knew what is called caution. I lived so extravagantly that it became a problem for me to save for rainy days. My pocket money was the first to run out and before long I will start looking for where to borrow. My fellow students were my first point of call. One day, one of them deeply insulted me when I asked him for a loan. I thought about it deeply and decided to change.
Believe me, I was so liberal in school that I would give away my underwear just to help other students. Little did he know he was being silly. Some of them hid their things and came to share mine. I did not see it coming. I thought I was doing humanity a service. My eyes were opened to reality the day I decided to go stingy, so to speak. It may be that you have sunk into perpetual debt, so that you even go into debt to pay off debts, regardless of the interest. Many companies have collapsed as a result of the owners eating away at their capital. The moment they see money, they start spending, especially on irrelevant things. As a business man/woman, what do you spend your money on that returns profits to your business?
You go on a spending spree the moment money comes into your hand. Ask yourself some questions. Some of us have the belief that village witches are the cause of our problems. Let me tell you that the money you have in your hand belongs to you. It is only spent on anything with your own approval. If there are witches there, you have power over them to control them. Just do the following:
- Track your expenses – If you don’t keep track of how you spend money, you’re likely to underestimate how much you spend in certain areas or even forget some expenses altogether. It is very important to save your receipts and messages or connect your bank accounts and credit cards to an application that calculates expenses for you.
- Limit your exposure to debt – Realize that ‘too much credit’ can be very damaging. Taking out multiple loans at once increases the risk of missing a payment and then getting stuck in nasty cycles of debt: constantly taking on additional loans to pay off previous loans you’re already struggling to pay off is an abrasion. It is very important that you only apply for loans when you need them. A loan is a serious obligation and should be treated as such. Assess your needs before applying for a loan, and always try to ask yourself if it’s worth taking out a loan at this time.
- Begin with the end in mind – Only take out loans when you are sure you will have the means to repay on or before the agreed due date(s). Be sure to confirm all interest/fees associated with the loan before applying. Only proceed when you are sure that you will be able to afford the expected payments. Do everything you can to avoid late payments. Late payments or loan defaults are not just a breach of the contractual agreement between a borrower and a lender; they also come with very real consequences that can be difficult to overcome in the long run.
- Minimize your cost of living – When your cost of living is too high, what you call witch and wizard activities is likely a result of the high expenses you incur on a daily basis. It is recommended to cut the coat according to your size. In other words, try as much as possible to review how much you spend on your fixed expenses and look for areas where you can downsize.
- Invest wisely – Not investing your money in profitable businesses can create redundancy. Investing helps you make money with money and keeps you financially secure. Basically, you let your money work for you.
- Avoid buying on impulse It is natural to say that only animals act on impulse. The animal nature of man can lead him to anything but wisdom. It is in the nature of many people to be drawn to a nice pair of jeans at the store while shopping for some household items and therefore cannot resist buying them simply because they have money in their wallet. Impulse purchases can be extremely bad and need to be controlled if you want to stay out of debt.
- Avoid comparing yourself to others Constant comparison between yourself and your colleagues or friends is never a good idea, as you will surely find differences that will make you see the need to catch up with them. That is not necessary. Focus on yourself, building your savings and retirement fund.
It is important to see patience in line with what it is: a virtue. Being able to look forward to something without being restless or frustrated is a great skill to have. Break the cycle of living in debt. I did it and got over it. You also can!