If you are thinking of borrowing money for any reason at all, it is always a good idea to check first to make sure that there are not any better alternatives. This is because borrowing money can have a number of disadvantages despite being extremely helpful at times. It has a financial cost for one thing and there is a responsibility as you have to come up with repayments each month in most circumstances. It can even cause stress to some people if they struggle to make repayments or just knowing that they have to come up with the money all of the time. This means that sometimes it can be better to find an alternative to borrowing money and there are a number of things that you can try out first.
If you have savings then it can be a really good idea to use these rather than borrowing money. This s because it will normally be cheaper to use savings rather than getting a quick payday loan. There may be a few exceptions to this, so you need to check but normally the interest on savings is low and the interest on any loan is high. If your savings are tied up in a bond or notice account then calculate the additional losses that you will suffer from cashing them in to properly check that you will not be disadvantaged by using your savings. It can be hard parting with savings as it is likely that you have worked hard to build them up and you will want to look after them. You might even have something in mind that you want to buy with them. However, it can be a good idea to consider the cost of borrowing compared to saving and how you can start putting money regularly into your savings account like you would if you were repaying a loan.
If you do not want to use the savings that you have or you do not have enough in the way of savings, then saving up money could be an option. Obviously, if you are borrowing to buy something in an emergency then you will not be able to wait and save up. However, if it is something which is not urgent, then you should be able to wait and save up and then you will not have to pay the extra money for the loan. So try to put spare money aside into a savings account and then you should be able to accumulate enough to pay for the item eventually.
Spend Less on Other Things
If you are borrowing to help you to make ends meet, then you might be able to reduce how much you are spending and that could be enough to enable you to save enough money so that you will not need to borrow. You could do this by checking prices on the things that you buy and seeing whether you can buy them cheaper elsewhere or switching to cheaper brands. You also might be able to buy less items if there are things that you are buying that you do not really need.
It could also help if you try to earn more money. It can be a good idea to have a think about whether there are any ways that you can get more. This could be by finding a second job, some temp work, online work, doing some freelancing or something like that. There are a lot of options and opportunities to earn money, it is just a matter of finding one that will fit with your skills and lifestyle.Read More