There are plenty of reasons why one should avoid getting into too much debt; after all, it’s just another responsibility which can stress you out over time. Of course it’s ironic to talk about avoiding personal debt when the entire world is essentially built upon a foundation of debts (that’s basically what all fiat money is, debt – a representation or store of value which leverages the ability of a population to provide the collateral/labor/innovation for its worth, usually through the sale of government bonds). Anyway, enough about that, let’s focus on why you should personally seek to minimize your personal debts, shall we?
First off, if you have too many debts to deal with you’ll find that your credit score will be directly affected. Since a lot of purchases, home rentals and loans require credit checks to approve financing options, having excessive debt basically means that certain options might become unavailable to you. For instance, if you want to get a loan in order to buy a home, or start a business a lower credit score might make those notions impossible. The problem here is something of a catch-22, you see. It might very well be the case that your only quick way out of debt is to start a business. Well, needless to say, if you cannot actually get the funds together to get something going you might remain in debt for quite some time.
Likewise, if you come into too much excessive debt, you might suddenly discover that your paychecks are being docked. In other words, certain institutions will often work with courts, banks or companies in order to take payment amounts directly from your take home pay. Moreover, you may even be prohibited from leaving your country, which also means that you’ll probably have your paycheck garnished regardless of whatever job you take.
However, the most obvious why you should avoid getting into debt is accumulated interest. As you are probably already aware, interest is simply additional amounts of money which are added to the principal amount in order to offset the slower speed at which repayment is made. Simply put, if you allow this interest to accumulate you will likely find that you’ll end up paying double if not triple the amount you would have normally paid. In other words, interest is the big killer and will end up draining you financially, physically and perhaps even emotionally.
Lastly, there’s the stress associated with debts and paying them. As you are probably already aware, stress has been linked to a number of detrimental health conditions, some of which are quite serious. If you are forced to live with that kind of stress it could very well take a toll on your health.