Don't go into debt to pay for these five things
In some cases, borrowing money helps听build wealth. Most people need a mortgage to buy a home, for instance, and student loans allow many people get an education听that leads to听a career.
But in other situations, going into debt does听more harm than good. When you鈥檙e听听鈥� and the interest that comes with it 鈥� you鈥檙e giving听someone else money that you could be saving. In other words, debt payments are money听you鈥檙e not investing in your future.
Charging that new computer or handbag might seem harmless, but if you can鈥檛 really afford it, you鈥檙e running up debt 鈥� and debt restricts you financially and ultimately limits your future.
You should especially avoid going into debt to pay for these five things:
1. Vacations
No matter how much you need a break, it isn鈥檛 worth going into debt for a vacation. Yes, you鈥檒l return to work with enviable听photos on your smartphone, but you鈥檒l have to put in a lot of hours听to pay off the trip. Even worse, making debt payments will hamper your ability to save for the unexpected. If you get听laid off while you鈥檙e still making payments, you could be in a听bind.
Vacations should be rewarding and rejuvenating. But going into debt for an amazing trip will just pile on the stress after your return. The memories might last, but so could the bill.
2. Gifts
People often throw financial caution to the wind during the holidays or on special occasions. It鈥檚 easy to justify spending to create magical memories 鈥� and it can be hard to admit it when听you can鈥檛 afford the gifts on your family鈥檚 wish lists.
Remember that your children won鈥檛 love you any more or less because of the awesome presents you give them. They could, however, learn about sacrifice and budgeting if you set an example. Isn鈥檛 that better than any stuffed stocking in the long run?
3. Clothes, shoes and accessories
Retail therapy is a reality for many men and women. People buy things in the hope of portraying more confident, put-together versions of themselves 鈥� and sometimes it鈥檚 tough to听walk away from a good sale. There鈥檚 nothing wrong with going shopping. But when you rely on objects that you can鈥檛 afford听to make yourself feel good, it becomes a problem.
Avoid charging anything on a credit card that you can鈥檛 pay off right away. Looking fabulous while being buried in debt doesn鈥檛 enhance your life. It makes it more burdensome.
4. Gadgets
No one needs the newest Apple wearable or Bose noise-canceling headphones. But you might think, 鈥淭hat new smartphone will keep me organized,鈥� or 鈥淭he robot vacuum will mean I have to clean less.鈥� The fact is, you accomplished those tasks before these听gadgets existed, and having the newest technology won鈥檛 change your life that much. Even worse, the next greatest thing will likely hit store shelves听before you鈥檝e paid off your new gadget.
5. Weddings
You and your partner听might have dreamed about your perfect wedding day, but you shouldn鈥檛听go into debt to pull it off. A听听by researchers at Emory University in Atlanta showed that couples who spent more on their weddings had shorter marriages than those听who kept costs down.
This is understandable. Starting off your marriage in debt causes stress on both partners. And couples who focus on the event rather than the relationship can lose sight of why they wanted to get married in the first place.
Debt cycle
Spending money on material items or extravagant events won鈥檛 change your life in significant, lasting ways or听. Eventually the novelty will wear off or the event will end and you鈥檒l want to buy or plan something new and exciting, starting the debt cycle all over again.
The next time you鈥檙e tempted to go into debt to buy something, remind yourself of that debt cycle and practice self-control instead.听and save for those desirable items, getaways and events. It鈥檚 the only true path to financial stability and peace of mind.
听is a financial and relationship counselor at听.听Learn more about Kurt on NerdWallet鈥檚听.
This article first appeared in .
