The next decisions are not recommended for financial stability:
I need a cool audio system with an amplifier and 5 speakers. I will take the money from my overdraft.
WRONG! I know you are waiting for this moment for some time now. I know you want them today, but the price is too high and it won’t worth it. Save for a few months, borrow the difference from your friends and you will have your desired system three months later without making the bank rich.
I can’t stand the bus anymore. I need a car. I will take a car credit of 10 000 dollars.
WRONG! If the only reason is the bus, you are taking the wrong decision. Yes, I know what you are saying: “it is easy for you to speak, as long as you are driving your nice car and you are getting to work in 15 minutes.” You are right, I have a car. However, I am only using it for weekends and long trips at the mountains. It is not worth it to spend hundreds of dollars every month on gas and repairing as long as the subway monthly subscription costs me 20 dollars.
I am planning to have a family, and I can’t stand the rent anymore. I am taking a mortgage.
Surprisingly, this is WRONG! Do you really want to be a slave for a bank for the rest of your life? Yes, I know, you will spend the same money as you are spending on the rent. However, 30 years seems like a huge period. It is better to pay your rent for a few more years and to follow the next simple advice:
I won’t tell you to save once more. It is easier to save for an audio system or a car. And yes, it is clearly that you will need a mortgage to buy the house of your dreams. However, before engaging yourself into this initiative, you might think about earning that money. Even if the bank gives you the credit, think about sacrifices that you will have to do. Better, wait for a few years, try to get a getter job, and take the credit only when your earnings would allow it. The best credit is the one that pays for itself. Otherwise, it is only another bad decision.