Credit comes at a cost
Rosenthal Mutakati Ghetto Blast
LOW disposable incomes arising from poor or lack of industrial productivity and paltry salaries goad the ordinary person to borrow often to get by.
A month generally has 31 days, yet the money most people earn barely lasts a week.
People borrow from banks, employers, peers and or fly-by-night dubious indigenous money launderers without traceable references that have mushroomed in the communities in which we live.
Reasons for borrowing differ from individual to individual depending on need and circumstance.
Borrowing has become an integral part of life because of realities of life like accidents and funerals.
But, some people borrow money for the sake of it.
Kamoyo kekungodawo shagi.
As we emerge from the long Heroes and Defence Forces holiday, high are chances that everyone who phones will be seeking to be extricated from a financial crash. So long was the holiday that people are on a borrowing crusade just to be able to put food on the table for the family.
“Shaaz, I am very liquid but I could not stop borrowing because mukana wacho wanga uripo,” you hear people saying while quaffing beers at a bottle store.
“Ndakangoona kuti handigafi nenyota makumbo ari mumvura ndobva ndangojamula ka$600 saka ndiko katiri kumbokiya pano apa.”
Bachelors have their queer reasons for spending cash meant for the future now.
“My girlfriend just arrived from South Africa on Monday and I desperately needed to prove that I am a man worth his salt by going the extra mile to impress her. I needed to make her feel loved so I ended up borrowing to buy her presents and book a hotel,” a young gentleman with a furrowed brow said innocently.
The bearded young man spoke at length about how easy money can make a man fly into a woman’s heart.
Single ladies are also no exception.
“There was a wedding in the family and I desperately needed a radiant new dress. To look fabulous you have to spend. After all, mari ngaikuchengete kwete iwe kuzvipa mutoro wekuichengeta,” giggled a lass who identified herself as Primrose while playing with her hands aimlessly.
Most parents borrow cash from their employers and banks to meet school fees requirements for their children while the remainder is channelled towards food and transport with the very few remaining dollars committed to pints of beer.
Some people borrow so they can appear well-oiled in the eyes of other people.
Lifestyles most people lead are too armchair that one needs an extra source of income to sustain them.
Panotoda churu chemari kuti zviite.
Unbeknown to most people gentle reader, credit comes at a cost.
When consumers and businesses use debt financing, they restrict utilisation of future cash flow because the borrowed money requires ongoing payments that include principal and interest.
Committing to regular debt payment instalments means you have to allocate cash each month towards the repayment obligation.
For individuals and families, this ongoing debt burden is sometimes overwhelming and makes for significant budget challenges.
For businesses, putting much of your incoming cash flow toward debt repayment limits your flexibility to invest in growth as you see fit.
Failure to control one’s personal appetite for cash has led people into the grave after they turned to prostitution and crime just to earn more.
Gentle reader, money is the root of all evil.
If one develops an undying love for money, they end up falling into traps of the cunning who offer “help” at the cost of an arm and a leg.
Most men who bed married women entrap them by lending them more money than they can repay, creating fertile grounds for blackmail.
“Zvino ambuya mati mari yangu munozoibhadhara nei imi muchiti hamudi kuvata nemurume asiri wenyu? Saka apa tavekutoda kutora mwana wenyu kuti zvangu zvidzore,” you hear these money lenders saying.
Some of these Shylocks who run unregistered companies across the length and breadth of the country will ask you to surrender title deeds and cars in exchange for cash equivalent to a third of the value of the property surrendered.
The smiles they wear when the deal is sealed disappears when repayment time comes.
Some creditors have teams of thugs to attack defaulters so as to induce payment.
This affects the dignity of the debtor.
There are a good number of people who appear to give you a shoulder to cry on in times of strife, but are quick to leave you in the lurch once they have achieved their intended goals.
Borrowing money from a bank is an inevitable part of most people’s lives.
Whether for a home, car, or college; many people must seek a way to fund their purchases. Although there are instances when it becomes necessary, there are disadvantages of borrowing money.
A major disadvantage of borrowing money from a bank is the fact that you will end up paying far more than the home, car, or education cost.
This is called interest, and it is a big disadvantage.
Additionally, owing money to a bank for large items can make trying to get small items hard. This is because this increases your debt-to-income ratio, which can have a negative impact on your credit standing.
Having to pay back the money is typically the worst thing about borrowing. Some debt is actually useful when it is well spent.
However, consumers and businesses face several disadvantages when borrowing money.
This is especially true when credit use is not well planned and the use of debt does not make financial sense.
Borrowing is part of life, but limits are needed.
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