Five Things You Lose When You Borrow Money

Lost

A new car, a fancy TV, a college education: People are often enamored with the things that they expect to get when they borrow money. But hidden behind all the attractive gains are a whole lot of losses.

In almost every situation, borrowing money to get stuff is a bum deal. Yes, borrowing money helps you to purchase something before you’ve saved the money to buy it outright. But getting that stuff comes at a high price — when you borrow money, you give up a lot of things. In the end, you lose more than you get.

Debt causes us to lose things that are both tangible and intangible. Here are five of the most important things you lose when you borrow money:

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Never, Ever, Ever Borrow Money From Family

Family Feud

If there’s someone in your family that you’d like to see less of, there’s one surefire way to ruin that relationship: Lend them money.

Our families can be the greatest blessing that we ever have in this life, but they can also be the greatest burden. The key to having thriving, healthy family relationships is knowing how to foster the former and avoid the latter. And that means keeping them free from debt. [Read more…]

The Big Squeeze: Is Your Debt Juicing You?

Juicing fruit

If you’ve ever tried to make a glass of fresh juice from a bunch of raw fruit, you know how much pressure it takes to squeeze the juice out of an orange, lemon, lime or grapefruit. And if you’ve ever tried to go back and eat a piece of fruit that has already had the juice extracted from it, you know that a spent wedge of citrus isn’t nearly as satisfying as a plump, juicy one.

Making juice by hand is a tedious and tiring process. People that make fresh juice commercially, like in restaurants, use large, automated juicing to get the very most juice possible out of each piece of fruit.

Those big restaurant juicers, with all of their mechanics and impressive squeezing power, are a lot like our modern debt industry. If you get caught up in it, debt can squeeze the very best out of your life and resources, leaving you feeling limp and dried up in the process. [Read more…]

Get Out of Debt Before Buying a Home

First-Time Home Owner

It’s a situation that many 20- and 30-somethings find themselves in: You’re married and have good jobs, and you’d like to buy a house… but you still have some debts left to pay off. So which should you do first — purchase a home or get out of debt?

Unfortunately, the status quo in America is for young people to carry large loads of student loans, credit cards and other debt into marriage, and most couples actually accumulate more debt as they go in life. This is a really bad thing, because debt is a form of financial slavery that costs us tons of money over the course of our lifetimes.

We believe that the best path to financial freedom is to pay off your debts as quickly as possible, which means holding off on buying a home until you’re debt-free. This isn’t a popular opinion in America today, but it makes a lot of financial sense. [Read more…]

Use Goals to Get Out of Debt in 2014

Goal!

There’s a difference between goals and dreams. Dreams tell us about the things that we’d like to do. Goals tell us how to get them done.

If you dream of getting out of debt, but have struggled to achieve that reality, you’ve probably experienced this principle firsthand. Without specific plans of action and the discipline to get them done, your debt-free dreams don’t get you very far.

Though we’re still in the run-up to Christmas right now, the New Year will be here before you know it. This fresh start affords a great opportunity to convert your dreams of freedom into an actual plan for getting out  of  debt.

In order to do that effectively, you need to set some goals. [Read more…]

Why Borrowing Money for Christmas is a Terrible Idea

Christmas Gifts

If you’re willing to go in to debt, you can buy bigger, better Christmas presents for the people you love. That’s good for everybody, right?

Wrong.

We’re in the thick of the holiday shopping season now, and you’re probably becoming keenly aware of what you can and can’t afford to buy with the balance in your bank account. There is no shortage of ways to “extend” your buying power, though, and they all involve some kind of credit.

It can be tempting to buy big gifts and charge them to your personal credit card, or to open special store cards in order to get some kind of savings on an item that you can’t afford to pay cash for. But these are terrible ideas.

There’s no such thing as good debt — not even for Christmas presents — and borrowing money for the holidays is only going to make your financial problems worse. [Read more…]

How Our National Borrowing is Hurting Our Kids

Child-Eating Monster

You love your children and would never do anything to hurt them, right?

Right?

I have no doubt that you love your kids. And unless you’re an abusive wretch, you probably wouldn’t ever intentionally do something that you knew would cause them harm. But if you support government policies and spending programs that are increasing the national debt, you’re putting your children’s future at risk. [Read more…]

Borrowing Money Makes Problems Worse

Black Magic

If you’re facing a financial problem, and you think that borrowing money could solve that problem for you, think again: Debt only makes problems worse. Always.

Debt is a bad deal in so many ways. It’s costly, it’s habit-forming and it leads you into a kind of financial and spiritual slavery.

Unfortunately, our society often fails to see this. Debt has become a fundamental part of consumer-driven lifestyle in Western culture. And as we collectively dig ourselves deeper and deeper into debt, we’re only causing bigger and bigger problems for ourselves. [Read more…]

Debt, Risk and a Jenga Tower

Jenga

Borrowing money is like playing Jenga with your financial life: Make one wrong move and everything will come crashing down.

If you didn’t know any better, you’d think that borrowing money was the way to get ahead in life. After all, everyone else seems to be doing it. But when you examine reality through the lens of truth, you learn that debt only adds risk to your life.

If you build the tower of your lifestyle on debt, one day you could find that the risk was your undoing.

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Don’t Borrow Money to Buy Real Estate

Gambling on Real Estate

Is your budding real estate empire built on a solid foundation? Or is it just a house of cards?

After a rough patch over the past five years or so, real estate seems to be making a comeback these days. Home values are going up, and more and more investors are  wanting to get back into real estate. Even a lot of people that I know, who are not wealthy or accomplished investors by any means, are making noise about getting into real estate themselves. The ones that plan to do it on borrowed money worry me a little bit.

Some of those people I know — even friends of mine — will disagree with what I write here, or may even be upset with me for writing it. That’s a chance I’m willing to take, though, because borrowing money to invest is a really, really bad idea. And I owe it to my readers to warn them about it. [Read more…]

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All content on this site is given on a general basis and is intended for informational use only. The content does not reflect any professional legal, investing, accounting or tax advice, and should not be used as the sole basis for making financial decisions. Always consult a certified financial professional before investing.