I remember my first salary and the peace of mind I had when I spent my own earned money. well I started earning part time when I was only 17. Well, I finished my education or so called degree as we Indians love to call it and joined my 1st company. I already had my bank account so salary was linked to it. 1st of every month I would get money in my bank and I would spend most of it by end of the month. I didnt know what is saving all about.
Then one of my close friend found it very surprising because I was earning good, and I should save money. He gave me an idea, open multiple bank accounts and put 75 percent of your salary in those account and use only one debit card which is your salary debit card account.
I started slowly, and within 1 year before I knew I had good amount in 3 bank accounts apart from my normal expenses which I made using the salary account. Debit account always keeps you in check and gives you a pinch whenever you are about to go overboard. And best part is you never feel the temptations and you are happy spending whatever you earn. and may be invest whatever you earn.
Well I dont know how but Credit card companies got hold of my Data( my name and phone no) started calling me, and initially I wasn’t sure, I didnt listen to my dads advice, which I should have. I signed up for 1 credit card. But it wasnt so bad for almost 1 year I maintained it well, till I knew the concept of paying minimum amount in credit card bills.
I tell you, that was the day when I paid my minimum credit card bill and I could shop again using the card, I was so happy and today is the day, I had 5 credit cards, all of them over limits and almost under debt of over 2 lacs Inr from credit cards from banks, 4 of them are on verge of closure, my all savings are gone paying the interest that accumulates when you pay minimum and now still I have to pay almost full of my account.
I would say it credit cards fault entirely, but I was naive too initially, I used most cards and paid only minimum and was happy to see my lifestyle get better and always thought time will remain the same and I would pay them off slowly, but I was wrong, I lost my job, dues increased, I had to shell out savings to pay my cards, and still couldn’t pay them off and now I am stuck with a bad debt from credit cards from most banks. of course, banks also freeze my savings account if I stop the payments and my cibil records becomes bad and ofcourse in future if I need home loan, I am screwed. So where am i? in this war of debit vs credit cards, I lived like a king for some time with credit cards, but mind you
if you earn less than 2 lacs per month maintaining credit cards in India is impossible because temptations will always rule, you will pay only minimum to continue the cards and shop always and suddenly if you have a bad luck, just like a batsman bad run when he cant score for 20 innings, you are in total mess.
On other hand, Credit cards if maintained properly do give you a financial security in case of emergency and you can buy those luxury items which you will never dream of buying with your normal debit salary. but We as Indians are always traditionally taught to save money because that is what counts in the end. and thats why, we fall prey to credit card trap.
and then what happens, we are no where? or may be we are somewhere.
but I would suggest, Eat nice food, spend what you have, take loan/credit card only if you have surplus money to pay it off even if you do not have job or you dont earn.
or else who says there is no fun in living simple.:)
like I once Lived.
Love