When Not To Borrow

The other week I’ve discussed a couple of certain moments in life when borrowing with your credit card is appropriate. So, this time I want to touch on some of the times when it’s best to hold off borrowing and look at some other ways you can pay off the bill you’re dealing with.

When You Lack Money For Monthly Bills

Imagine if you ran out of every penny last month and by the start of the new month your salary didn’t go though yet, but you have to pay some bills. This is when you reach out to your credit cards and with a big sigh make the payment, knowing that it will backfire next month again. So what can you do instead of borrowing?

You can ask your family and friends for some money, or just wait a week or so. Usually any bill has a certain ‘expiration date’ and so it doesn’t need to be repaid straight away. I know how you’re feeling – exhausted from just having this at the back of your mind, as it fills you up with infinite ‘what if’s’. Try to take a couple of breaths in, and trust that money will come soon and you will be able to repay anything outstanding without getting in debt.

And while you’re mulling over that, I suggest to take your mind off in some way. I would recommend budgeting, but you know that it’s only me who relaxes by making spreadsheets in their spare time :D. Although, if you do make a budget, it should prevent you from ending up in the same situation twice.

When You Can’t Afford A Vacation

In the post about When To Borrow I mentioned that it is a good idea to finance a holiday though a credit card. However, there is another side to this story. If you don’t have money for the holiday already, and you can’t afford repaying that loan in full, then you should try not to borrow all that money on your credit card. The reason being, it makes you more financially unstable and creates some pretty high risk of having to pay interest on the money borrowed.

When You Already Have A Loan

Imagine that you’re already repaying your student loan every month. But then you also are thinking that you want to borrow some money for a new phone. After debating about it for some time in your head, you decide to go for it – you really need it for work after all, and you are getting some unspent money every month. After getting a new phone and adding to the monthly repayments, you end up in deficit.

Unless you’re super clear on your spending and whether you can 100% afford another loan, you should try not to borrow more. Like with the phone, many other purchases can be paid for in instalments, so take advantage of that when needed. Although, sometimes it can be another loan which looks like a payment plan, so be aware of that too.

Thank you for reading this post, I’ll be back to you with more money wisdom’s for artists tomorrow!

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