It’s often the big things in life that lead us to get caught up in financial worry and stress. It is not often that you will hear work colleagues moan that they can’t afford that lunchtime take-away latte for £4 but frequently they can be overheard worrying at the water cooler about how to afford house repairs, buy a new vehicle or pay their debts this month.
Perhaps the phrase count the pennies and the pounds will count themselves falls on deaf ears nowadays? But if you’re one of the few who still believe that pinching in everyday spends make for an easier financial outlook for those big buys then read on.
Wherever possible try to buy everything that you can do outright. This automatically reduces payments as there is no interest on an item bought outright. It also means that you don’t have to pay loan arrangement fees or ongoing bank charges to have accounts with overdrafts attached to them and so on.
Having said that it is sensible to have a standby credit card in case of emergencies. Make sure that your card stays active by buying one thing on it each month and then paying it off in full when the bill comes through.
Sometimes Borrowing is Sensible
Not everything can be bought outright and in these cases borrowing is a must. For example, if you are buying a house the likelihood of being able to pay upfront in cash is slim to none unless you have just won the lottery. (Which I doubt you have or you wouldn’t be reading a penny-pinching blog article.) In these situations, shop around to find the best type of loan for you.
It is important to remember that what suited your best friend may not be the best route for you. Everyone has individual circumstances such as employment, income and disposable cash that makes their loan application unique. So whilst it is good advice to talk to friends and family about your options, don’t let yourself get too caught up in other’s opinions unless they have had a truly awful ordeal.
Penny Wise Pound Foolish
Make sure that your approach to finances is balanced to ensure that you lead a stress free financial existence. It is fine to make packed lunches to save on your food money for the week but this isn’t going to offset the damage of driving around a flashy new car that you are paying extortionate rental rates on.
Think about all of your purchases in the same way and approach all of your buying in the same manner and with the same questions from that take away lunchtime coffee to buying a new house. Do I really need this? If so, is this the best place to get it from? Am I getting the best deal for this product and/or service? Is there another way? What is the budget option here?
Taking a balanced approach across the board will make sure that in the long term he savings stack up.