Borrowing is a good thing, but only in select scenarios when the stars align. For the most part, borrowing is a bit too risky to use too often and it can easily get out of hand. The fundamental problem with borrowing is that people over-leverage it. It becomes like a disease.
Borrowing can be good or bad depending on the source and the quantity borrowed. Borrowing should be a last resort, a final option after all others have been thoroughly exhausted.
The Budget Overhaul
The first thing to do is to overhaul the budget in a huge way. Make sure that any borrowing consideration is not taken lightly and is generally unavoidable. Now, some people can’t just make more money out of the blue. But, they can revisit the monthly expenses. Keep standards involving electric and water, but reconsider any extraneous expense. Have a Spotify account? How about Netflix? Consider packing these things away for a bit if borrowing can be avoided.
Borrow and Budget Even More
There is a state of “borrowing” that is often unavoidable, and that is okay. But, life needs to take a pause when borrowing is in effect. It is going to take more than a little patience and a whole lot of discipline. If it can’t be avoided, make thorough decisions about expenses, consider a second job, find a website that pays sporadically for services, and more. Readers can look at this site for more specific tips about budgeting when borrowing and how to make it work and stay happy.
No one wants to be in a state of borrowing. It is smart to get out of it promptly and efficiently. Take precautions while getting into it, but be proactive and conscious about getting out of it. If it means eating worse for a few weeks, do it. If it means having no television because it broke and the budget doesn’t allow for it to be replaced, find another hobby. Commit to a budget overhaul when the borrowing is in place. It will feel so much better once the debt is paid, borrowing is over, and stable ground is found once again.