Use money to find freedom, not bondage

If I have to pass on only one financial advise to my daughter it would be to never get into debt. In borrowing for the present pleasure, we rob ourselves of the future peace and happiness.

With the growth of banking and financial institutions, living with debt has become the norm today. To pay EMIs has not just become an integral part of middle class life in India but also a culturally accepted, expected and sometimes also respected norm.

“Rather go to bed supperless, than rise in debt.”

Benjamin Franklin

Any pleasure which is addictive can become bondage. And the addiction that is paid by debt is like a double edged sword. I understand that it’s not easy to live debt free- the impatience to yield to the temptation to own the next gadget/phone/car is tremendous. But it is not impossible. There is no temptation that can’t be resisted with the sword of wisdom.

I believe the best policy is to adjust your lifestyle to your earning, even if it is humble or meagre. Pretending to be rich makes you poor faster. Using credit to make lifestyle changes starts a hard to end vicious circle.

There is immense peace to live within one’s means. Living a simple life keeping good mental and physical health is far more valuable than buying lifestyle diseases with borrowed money.

“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”

Adam Smith

This doesn’t rule out or demean the importance of seeking security in life. It simply means that we buy something when we can really afford it. A decent place to live, a personal conveyance, holidays with family and so on are all worthy expectations but it’s better to patiently earn them. It will never be too late to buy a big house or a bigger car out of one’s savings.

“Never spend your money before you have it.”

Thomas Jefferson

One of the lessons I learnt from my Guru is to use money to buy freedom rather than bondage. This means we use our earning capacity to help us prioritise and focus on pursuits most valuable to us. Making simple changes like paying for external help for things like household chores, car wash, laundry etc can leave one with much wanted leisure time, which can be used for hobbies, reading, fitness, family and so many other productive pursuits. Spending on automation and systems can also helps boost productivity at work as well as home.

However, the most important motivation to live debt-free is the values that it inspires in us – patience, hard work, goal-orientation, confidence, contentment, self-control and willingness to make sacrifices.

He looks the whole world in the face for he owes not any man.”

Henry Wadsworth Longfellow

This is the simplicity and lightness of being that I aspire towards too. These are hard learnt lessons and I wish the next generation learns from our follies rather than by experience.

Let’s atleast consider a debt-free life to start with. Let’s chalk out a plan and get there. It’s the new 1% club.