Being able to save for all the things you need will put you in a much better financial position in the long run. This will mean that you pay less for everything you buy and put you in a less stressful situation. Keep in mind that some borrowers don’t care that they owe as long as they can pay it back.<\/p>\n
A crisis comes when there is a job loss or when some health issue arises and Kitty has no money to pay the bills.<\/p>\n
A person who has properly prepared his finances will take these types of contingencies into account in making his financial plan.<\/p>\n
Saving money is a no-brainer. Here are the top five reasons not to borrow.<\/p>\n
1 no religion<\/p>\n
Borrowing money for things you need or want puts you into debt. This means that you owe someone else. Sooner or later, all of this will have to be paid off plus interest. A debt is not forfeited until it is paid, so there is no need to bury your head in the sand if you are indebted to your creditors. Creditors have every right to expect their money to be paid back whether it is the bank, another lending institution, or a family member.<\/p>\n
2 The cost of borrowing<\/p>\n
There is a cost associated with borrowing money and this cost is interest which is sometimes referred to as “dead money”. Paying interest on things you buy on credit increases the cost of the item. The habit of buying goods on credit adds up to a huge amount over the course of your life. This interest money could have been used to build a nest of eggs. Business debt is the worst type of credit spending because an item purchased on credit loses value over time. Another name for business debt is stupid debt.<\/p>\n
3 cash ready for emergencies<\/p>\n
Emergencies appear from time to time. The car breaks down, the washing machine needs fixing, you have a toothache and need to go to the dentist, and you need a new pair of glasses. A person can have a number of reasons for a financial emergency. If you have money set aside for these situations, you can handle these emergencies without worrying about whether you have the money to pay for them. Every responsible person has an emergency fund on hand to protect them from the financial shocks that can happen from time to time.<\/p>\n
4 nest egg for the future<\/p>\n
Saving money means you can build a nest for the future. If you are a responsible person, you will have a pension system of some sort where part of your salary goes into the fund. In New Zealand it is called Kiwisaver. I can’t stress enough how important it is to sign up for Kiwisaver if you’re from New Zealand. Government incentives make this scheme a no-brainer. Your country will have its own scheme with its benefits.<\/p>\n
5 Take advantage of special offers<\/p>\n
If you do not have money, you will not be able to take advantage of special offers. This does not mean that you should spend money on something for no other reason than that it is special. Common sense and restraint must be used here.<\/p>\n
6 A dollar saved is a dollar made<\/p>\n
There is an old saying that a dollar saved is a dollar made. The truth is that a dollar saved is better than a dollar made because you don’t pay tax on a dollar saved which is not the case when a dollar is made. Every dollar you save can work hard for you in whatever investment you put into it.<\/p>\n
A competent money manager will have no space in their vocabulary for words such as debt, credit, credit card, loan, temporary purchase or hire purchase. In fact, these are all dirty words for someone who wants to get ahead financially.<\/p>\n
Having said all that, there can be times when borrowing money is beneficial.<\/p>\n
but…<\/p>\n
It is very big however.<\/p>\n
You have to be absolutely certain that the payoff will be worth your time.<\/p>\n
Take a student loan for example; You must be absolutely sure that the type of job your course qualification helps you with is something you really want to do, otherwise the entire course will be a waste of time and money.<\/p>\n","protected":false},"excerpt":{"rendered":"
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