One of the biggest challenges of being a freelancer is sustaining your income, lifestyle, and keep up by investing in the business you are in. Last June 27, I catched up with Carlo Ople by accepting his invite to attend a financial planning briefing by Randell Tiongson.
Everything that he discussed there about savings, credit, among others, I wish were taught earlier during my younger days. Usually, when you are in your mid to late 20s, you'll get and experience a lot of stuff for the first time. One of them is access to credit and credit cards.
Today, I use credit cards as a tool in the conduct of my business and in situations where cash is not enough or accepted. But in the past, I had my share of carelessness and its consequences leave a permanent scar.
The limit in a credit card tends to blind you on the stuff that you "like", although "not urgently needed", and you start buying things that you thought can be paid off easily. Then your account becomes delinquent which you may eventually settle and in some cases forgotten.
But in this day and age, there's no forgotten credit and with search technologies online, you may just receive a phone call one day and there goes your collector who threatens you with an overbloated amount, a lawsuit, and an amnesty offer. Those of us who have been there knows how traumatic can those phone calls get as they tend to shaken you and even break you down.
When I encounter friends who need to borrow money to pay off another debt, my advise always boils down to negotiation for a reasonable amount as allowing yourself to be harassed may make you do more stupid things and further bury yourself into debt.
With those experiences, I have learned to live within reasonable means.