Shop without borrowing if you can
Loans and credits are not necessarily bad and are a natural part of our daily lives, but what is important is that you do not take out loans or trade in credit unnecessarily. All loans and credits cost money in the form of interest and fees and what you buy becomes totally more expensive in this way than if you were to pay for them directly. Therefore, it is important to think before buying something with borrowed money.
We usually advise on how to find the best loans and how to save money if you decide to take out a loan, which of course is also good, but sometimes the solution is not to borrow at all. Maybe then you can’t always get all the things right when you want them, but it is also a part of life and something to be expected.
How then should you do when buying things?
Of course, it is best to simply buy things with money that you have in your account and that are not needed for other things like bills, food or whatever it is that you can do with the money in a normal month. If it is now that you want to buy something that you cannot really afford based on the money you have in the account, then how should you do it?
I intend to come up with suggestions on how to proceed if you want to buy things without shopping on credit or taking a loan for advice. Of course, these alternatives exist, but the idea is that you should avoid paying extra for things you want to buy.
Save money together and buy cash
If you do not have money in the account to buy what you want to buy then the best and most obvious advice is that you simply wait to buy until you can afford. Of course, you can only wait and wait for a time when you have more money and maybe a better economy, but you can also work actively to get advice.
The idea is that you simply start saving for what you want to buy. If, for example, you would like to have a nice jacket that costs USD 5,000 and you do not have more than USD 2,000 extra in the office at the moment, then it will be taken USD 3,000. Then you need to save up to USD 3,000.
If you would only try to wait a day when you happen to have USD 5,000 over, it can take a long time before you can afford it, so it is better to take the matter into your own hands and set up a plan. Imagine that you save a certain amount each month, based on what you can reasonably save. It may be, for example, USD 200, 500 or 1,000.
The more you put away the faster you reach the goal. If you save USD 500 a month, it will take you six months to reach the USD 3,000 you need and if you spend USD 1,000 a month it will only take half that time. Of course, this also requires that you do not spend the USD 2,000 you had from the beginning but add them to the savings and leave them alone.
Once you get together for USD 5,000, you can buy the jacket you wanted. The nice thing about this is that you have no extra costs for your purchase, which you would otherwise have had if you had been shopping on credit. For example, interest on borrowed money, fees etc. can mean that you have to pay an additional thousand for the jacket in addition to what it costs in store and you do not have to with this method.
Save money on what you intend to buy
One way to make it easier to buy what you want to buy is to be better at finding good prices. It is underestimated to compare prices from different stores etc to see which has the best deals. Similarly, it is good to watch out for something being sold at a promotional price or at a discount.
With a little luck you might be able to find your jacket for USD 4,000 instead of USD 5,000 if you are looking for a little. If you only have USD 2,000 in the account, you obviously still cannot afford to buy it straight away and then you should think through your alternatives and gladly wait until you can afford it. However, it is always better to buy at a lower price if possible.
This need not only apply to the exact thing you are going to buy, but your finances in general. If you can save money and cut down on your costs by buying cheaper things and finding lower prices on things that you put money into each month, you can also get more money over.
If you get more money, you also have better opportunities to buy things that you want to buy or to put more money into savings each month, to reach your savings goals faster. It’s a double win in that way.