There are many debt considerations in personal finance, whether to take a new loan, apply for a new credit card or accept student loans to help kick start your career. Following the government’s example we would all spend with abandon and borrow with recklessness. Tough economic times, though, are helping to get the message that the best debt is no debt at all.
When money and credit were easy, and the economy was experiencing persistent growth during the boom years of real estate and technology, borrowing and spending seemed a sound financial decision to leverage your cash capabilities. Current times have reversed this financial wisdom, teaching the necessity for ready cash on hand and a freedom from debt liabilities that will benefit many for the years to come.
During the depression era of the early 20th century, our forbearers learned hard taught lessons about personal finance at the verge of starvation and desperation. They learned sound financial principles of frugality and saving your money for a rainy day. Farmers of the dust bowl learned the hard lesson that debt collateralized homes were not truly their own, without the security of debt free ownership. These lessons were dearly learned by the depression generation, and they served them well, but these lessons were all too often lost to following generations.
Now, the lessons of living debt free, with a frugal lifestyle and an eye towards wise personal finance are returning. Reckless consumerism and the idea of endless credit and boom economic growth left many of us in a state of shock when things turned, but these lessons can only be ignored at our peril.
What does history have to tell us about personal finance, and what lessons should we remember? The best debt is no debt at all, and one should mind carefully their personal finances. A penny saved is a penny earned, and moderation in spending is not to be frowned upon. Save for rainy days, as today’s boom is tomorrows bust. Money is not free, and one would do wise to learn its ways of increase. Your finances are like a garden, and should be cultivated with care. Neither a borrower nor a lender be.
Perhaps, financial wisdom has been around all along, if only we have the wisdom to pay attention. Find out more at firstqualityfinance.co.uk/loans-for-bad-credit/.