Nothing is totally good or bad, thinking makes it so and that is why life is not always a matter of black or white because there are lots of grey areas. Nonetheless, the level of certainty that surrounds some issues provides more than enough logic that can you help you to make the best decisions.
One of such issues in which grey areas simply do not exists is on the issue of what you should or should never borrow money to do. The logic behind borrowing money; to start a business, donate to your favorite charity or pay hospital bills might be subject to lots of fierce debates from both sides of the divide. However, I am certain that you should never ever borrow money to do any of the three things listed below.
1. A Wedding and/or Honeymoon
One of the things you should never ever borrow money to do is financing a wedding or a honeymoon, and yea, you should not even think about borrowing money to finance both the wedding and the honeymoon. The wedding is a single event (granted you’ll probably do it only once) but the marriage after the wedding is a lifelong experience and it doesn’t just make sense to start a new life with someone on a foundation of debts.
Instead of going for an elaborate wedding with all the bells and whistles, a small party with a select number of friends and family members might suffice. If you must have an elaborate wedding celebration, you can first go to the marriage registry, choose a wedding day far out, start saving as if your life depended on it, and then exchange your marriage vows in an elaborate celebration when you have the money.
By the way, the gifts you’ll be given on your wedding are not supposed to help you pay for the wedding. Remember that borrowing money to finance a wedding usually takes the honey out of the moon.
2. Buying your First Car or Replacing Your Old Car
Telling you not to borrow money to buy a car might sound counter-intuitive considering the fact that many establishments have different kinds of car loans to assist employees in the purchase of a car. However, you should note that a car is more of a liability than an asset except if you are a contractor, celebrity, or politician when you’ll need a car to give off an aura of been successful.
A car is a wasting “asset” because you’ll lose about 20% of its value as soon as you drive it off from the dealer’s lot. More so, a car is a liability because it takes money of your pocket for fuel, periodic maintenance and unscheduled maintenance.
Hence, it doesn’t really make much sense to take a loan that will be serviced with an interest to buy a car on which you’ll be losing money.
3. An Excellent Family Vacation
The third item for which you should not even consider borrowing money is a family vacation. A family vacation is supposed to be a great time for the family to enjoy each other’s company, bond and generally have a great time. Hence, it doesn’t make much sense if the father (or parents) is constantly bludgeoning the rest of the family about how much the vacation costs and how he’ll need to slave away to repay the loan.
You might take the risk of financing an individual vacation alone; after all, you’ll be the only on with the sullen expression mixed with a slight dash of regret every time you are handed the bill on your vacation and especially if the vacation doesn’t live up to your expectations.