Living Life On Borrowed Money: Warren Buffett’s Warning For People Living On EMIs And Lessons To Learn Ahead Of Festivities

Spending money sensibly has become a virtue in today's world since there are countless ways to indulge, from branded phones to expensive cars. There are people out there who go for EMIs and credits to buy something expensive. Warren Buffett, one of the most successful investors of all time, may be someone you should listen to if you too buy things on EMI and want to reconsider the decision. 

Buffett, the CEO of Berkshire Hathaway, offers advice that applies to every financial decision made in everyday life. Buffett believes that only if you know where not to waste money can you protect money. Known for his simple yet powerful financial advice, Buffett has insightful teachings on investing that can change the way you think about investment.

The latest iPhones are out and there are deals with 'no cost EMIs' everywhere. Many consumers are opting to pay with EMI when purchasing iPhones. If Warren Buffett's idea is considered in situations where people buy Apple phones on EMIs, it would be seen that he would have advised people to live within their means and protect their freedom from interest payments.

There is a clever psychology behind EMIs. It will ask for monthly installment payments rather than the entire cost of a phone today. During Diwali, when everyone around you is upgrading, you also feel the desire to do so. The 'Buy Now Pay Later' schemes are more alluring for people.

Buffett’s advice seems ageless in this situation. The CEO of Berkshire Hathaway often said, “You cannot get rich by spending more than you earn.” According to him, debt is a mental burden that gets heavier with time. 

Warren Buffett's credit-related life lessons apply to all Indians who use credit to make costly purchases. Buffett would tell us that unpaid credit card bills and EMIs compound, but they work against you. Buffett would advise us to set up a small amount of money for emergencies. When you have some savings, you are not forced to take something on an EMI.

Buffett views credit card debt as a trap that is extremely difficult to escape once you fall into it. The easier the facility of a credit card seems, the higher the interest rate is. The debt grows it becomes a heavy burden eventually.

According to Buffett, “If you’re smart, you’re going to make a lot of money without borrowing.” Buffett advises people to use credit cards as a convenience and not for overspending.

At this moment, Buffett’s voice matters more than ever. For decades, Buffett has cautioned that debt is a silent killer. Interest payments erode you gradually. What appears to be a small EMI now may end up being the obstacle preventing you from investing and saving.