It happens every day. You turn on the television and see people with things you would like to have. You open up a magazine and see ads of things you want. In your day-to-day living, you meet people who have bigger, better, and nicer things than you do.
The problem is, those things are clearly outside of your budget. I have news for you. Most of the people you envy are probably living far above their means. They wanted things they couldn’t afford either. The difference is, they took out personal loans or used their credit cards to buy them.
My advice is simple: if you can’t afford it, don’t buy it. Later on after you’ve saved up the money, you can buy it for less by paying cash — that is, assuming you still want it.
That is one of the advantages of sleeping on something — and on paying with good old-fashioned cash. Often you realize you don’t want it as badly as you thought you did.
Now, there are other reasons for taking out a loan. I will admit that for many people saving up enough money to pay cash for a house might be difficult. Most of us will take out a home loan. Taking out a business loan might also be acceptable. Just make sure its a viable business. Many fail in the first three years. Another popular and sometimes acceptable loan in a consolidation loan. This can be a good option to lower your interest rate and monthly payment. The big danger here, however, is that many people will then run up even more debt and dig themselves in twice as deep as they were before.
Whatever the reason for taking out a loan, you need to make sure that you will be able to make the monthly payments for the duration of the loan. I would pass on the insurance that is offered by loan companies. If you want insurance, see an insurance agent.
If for any reason you aren’t sure you’ll be able to keep up with the payments, then don’t take out a loan. Wait until you have saved enough for the purchase or look for other ways to raise the money capital you need.