Borrowing money is something that scares a lot of us but, unfortunately, it’s often unavoidable for millennials. With the cost of living going up and wages staying low, so many young people simply don’t get paid enough money to cover their rent and bills for the month. If you can find a better paid job or somewhere cheaper to live, that can be a huge help, but the reality is that those things are getting harder and harder to find. Often, millennials are left with no other choice but to borrow money. This causes a lot of apprehension because people worry that borrowing will always land you underneath a mountain of debt that will be looming over you for the rest of your life. That can happen, but it doesn’t have to. There is a right and a wrong way to borrow money; if you do it the right way, you won’t get into trouble. This is how to be smart about borrowing money.
Avoid It If You Can
This sounds pretty obvious but it’s worth reiterating. People often borrow when they don’t actually need to. They find that there is a shortfall in their finances and they need extra money to make ends meet. Sometimes, that means you’ll need to borrow but there are things you can do before that. Instead of borrowing straight away, see whether there are ways that you can save money on your monthly expenses. You might find that you can get your finances in order by cutting back on a few luxuries, without having to borrow money. If you make cutbacks and you’re still falling short at the end of the month, then you’ll have to borrow. When you find yourself in that situation, make sure to follow these tips.
Find The Right Loan Companies
There are a whole host of organisations that you can get a loan from, but some of them are a lot safer than others. When you’re looking for loan companies, you need to know which ones are good and which are bad. The ones to watch out for are the online short term loan companies; their loans usually have huge interest rates which can easily cause you to get into a cycle of debt. That’s how they make most of their money and you should avoid them at all costs. It’s much better to get a loan from a bank. It’ll be harder to get a loan from them than it would be from an online lender, but the interest rate will be a lot more manageable.
Zero Interest Credit Cards
Credit cards are one of the most common ways that people get themselves into financial trouble. It’s easy to spend a lot of money very quickly and the interest rates can get pretty high. But you can use credit cards to your advantage if you find some with a zero interest introductory period (usually a year or 18 months). You can borrow on them and only pay back what you’ve spent, without having to contend with high interest. The only thing to remember is that once the introductory period is up, the interest will kick in and it’s usually high, so make sure that you’re able to pay it off before then and stop using it after that.
Borrowing is scary but if you do it right, you can use it to your advantage and avoid getting into any financial trouble.