Borrowing money means getting into debt. There are many ways to land oneself in the clutch of debt - credit cards, hire purchase, student loans and the list goes on and on. When we borrow, we need to repay the loan amount or principal plus interest. Interest is what a borrower pays a lender for the temporary use of the financial facility or lender's money.
Debt is like a rubber band. When we stretch too far and it will snap. If the rubber band is to snap, it will hurt our hands. We have to learn to manage our debts well, live within our means and manage our financial affairs well. We must constantly spend less than what we earn. We must be mindful of our spending and learn to control it effectively.
Saving for emergencies is equivalent to keeping a functionable spare tyre in our car. It is advisable to set aside for a rainy day.
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