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TRENDING BASIC MONEY MANAGEMENT TIPS
05.05.2020 / Borrowing « Back to all articles
When Is the Worst Time to Borrow Money?
It Is Not Always a Good Time
Advertisements are never going to advise caution when approaching their products. The financing might sound cheap and easy, and the product might be appealing, but it is not always a good time to borrow money. The long-term effects of debt are too serious to be entered into lightly. Even if it is a desirable deal, there might be external factors that should keep it out of contention.
When the Contract Has Bad Terms
There are several reasons why a contract could include some undesirable components. A low credit score might force the lender to protect the investment with less than ideal borrowing terms. Perhaps the situation of the borrower is different from the standard deal. Whatever the reason, high-interest rates, adjustable payments and dangerous penalties for missed payments should be a reason to walk away. The document must be read thoroughly and questioned until it is fully understood before signing.
When Struggling to Make Ends Meet
This may seem like a good reason to borrow money, but it is certainly not. When an individual or family is struggling, then loans will only complicate the issue, not alleviate it. If the payments already scheduled are too much for someone, it’s best not to add to it in order to acquire a certain item or service. Especially when it comes to things like high-interest payday lenders, or the constant stream of credit card offers coming in the mail. It is better to try to deal with the known trouble than to provide a temporary fix that will have long-term (and compounding) negative effects.
To Cover for a Long-Term Change
Life does not always stay the same, and it does not always change in a good way. People lose their jobs, taxes can take their toll, and hospital visits can bring about a new normal to a person’s life. If the monthly budget has leaned out and does not look to be coming back any time soon, borrowing to maintain the previous lifestyle would be a terrible mistake. That is the time to re-evaluate, maybe to make a change in your job or at home. But if the situation does not look to be improving, the borrowing will just have to continue to chase the old way of living.
When Emotionally Distraught or Vulnerable
There is a good feeling that comes from purchasing something exciting, but borrowing money is never a good way to relieve stress. This does not have to be a new boat or car either, credit card shopping sprees or financed vacations also fit this category. When a tragedy has struck, such as a death or a divorce, debt should not be the place to seek solace. And when the loved ones in a person’s life begin to express concern about this issue, it is time to pay attention in case one’s trouble is too difficult to recognize.
Credit Talk
05.05.2020 / Borrowing « Back to all articles
When Is the Worst Time to Borrow Money?
It Is Not Always a Good Time
Advertisements are never going to advise caution when approaching their products. The financing might sound cheap and easy, and the product might be appealing, but it is not always a good time to borrow money. The long-term effects of debt are too serious to be entered into lightly. Even if it is a desirable deal, there might be external factors that should keep it out of contention.
When the Contract Has Bad Terms
There are several reasons why a contract could include some undesirable components. A low credit score might force the lender to protect the investment with less than ideal borrowing terms. Perhaps the situation of the borrower is different from the standard deal. Whatever the reason, high-interest rates, adjustable payments and dangerous penalties for missed payments should be a reason to walk away. The document must be read thoroughly and questioned until it is fully understood before signing.
When Struggling to Make Ends Meet
This may seem like a good reason to borrow money, but it is certainly not. When an individual or family is struggling, then loans will only complicate the issue, not alleviate it. If the payments already scheduled are too much for someone, it’s best not to add to it in order to acquire a certain item or service. Especially when it comes to things like high-interest payday lenders, or the constant stream of credit card offers coming in the mail. It is better to try to deal with the known trouble than to provide a temporary fix that will have long-term (and compounding) negative effects.
To Cover for a Long-Term Change
Life does not always stay the same, and it does not always change in a good way. People lose their jobs, taxes can take their toll, and hospital visits can bring about a new normal to a person’s life. If the monthly budget has leaned out and does not look to be coming back any time soon, borrowing to maintain the previous lifestyle would be a terrible mistake. That is the time to re-evaluate, maybe to make a change in your job or at home. But if the situation does not look to be improving, the borrowing will just have to continue to chase the old way of living.
When Emotionally Distraught or Vulnerable
There is a good feeling that comes from purchasing something exciting, but borrowing money is never a good way to relieve stress. This does not have to be a new boat or car either, credit card shopping sprees or financed vacations also fit this category. When a tragedy has struck, such as a death or a divorce, debt should not be the place to seek solace. And when the loved ones in a person’s life begin to express concern about this issue, it is time to pay attention in case one’s trouble is too difficult to recognize.
