These debts, which are generally unsecured, carry a high rate of interest, resulting in a significant financial outgo.Īlso, opting for them too often can result in falling into a vicious debt trap that can put your financial security at risk. On the contrary, lifestyle-related debt such as borrowing for undertaking a vacation or buying a new gadget can impair your savings potential and dent long-term wealth creation in the process. However, note that these debts help you create an asset and provide the necessary skills to your child towards building a constructive future. In the course of your financial journey, certain debts can’t be avoided, such as availing a loan for buying a house or funding your child’s higher education. Taking the example of Ramesh, if he didn’t require to pay EMIs on the home appliances, he could have channelised that money towards saving for his car. However, when you are debt-free, you are in a better position to focus on your life goals and most importantly save up for them. Along with these, carrying debt is a big roadblock in achieving financial freedom and saving for crucial life goals, both short-term and long-term. On the other hand, failing or delaying paying back to friends and family members can sour relationships. In case you fail to do so, the same can have an adverse effect on your credit score. SCSS Interest Rate and Deposit Limit 2023: Latest Senior Citizen Savings Scheme Details Here
