Saving VS Loans: What Is Better For Your Personal Budget
Each of us is probably familiar with the situation when you need to make a large purchase like home appliances or furniture, but your earnings are not enough. Significant costs are also required, for instance, to cure disease, pay the fine off, or for some other emergencies.
To resolve a problem, some people borrow money from a friend, others save their costs, and someone just takes on a Pay Day Say company loan.
Let’s analyze the pros and cons of saving money as well as review the reasons to use loans.
Reasons for saving money depend on your particular goals. Most folks usually save money to:
- Pay for education. Some prestigious colleges and high schools, e.g., in France, the USA or Germany, require annual payments.
- Buy a house or apartment. Buying a residential property is a cherished dream of many people from any country, and this is a good reason to save costs.
- Travel. Taking a trip across the globe is perfect leisure, especially if this is a honeymoon journey or a long-desired vacation. Expenses like a hotel suite, guided tours, souvenirs, etc., are obvious.
- Financial independence. The possibility to personally decide where and how to spend one’s funds is a key goal of all of us. If your earnings are not enough to feel completely independent, it’s time to start saving costs.
- Save money for retirement. The worst thing that each of us can face is helplessness. Retirement is a kind of helplessness that is impossible to avoid. Saving money for a “sheltered chair days” is a good idea.
Pros and Cons of Saving
Let’s name some advantages of saving costs.
- you control your expenses and train your willpower;
- your financial possibilities grow.
The key disadvantage of saving costs is that you need to wait for a definite period of time (a month, a year, etc.) until you are able to purchase a desired product or service.
Reasons for Taking a Loan
Loans are required when you need additional costs urgently, e.g.:
- To wipe off a debt. When you borrow money, you agree for certain terms of paying back. So if the X day has come but you haven’t got enough amount to pay back, apply for a loan.
- To pay off credit cards. There are certain time limits set for using the credit money, so if you don’t pay it off before a definite date, you should pay the late fees.
- To move somewhere. Some man made disasters or wars force people to move to other cities and countries. In this case, money is required to buy a ticket, to rent an apartment, etc.
- Address a doctor. None of us is insured against unforeseen illnesses or accidents which we should overcome. Health concerns require significant costs.
- To pay for a wedding. Marriage expenses suppose a lot of needs from renting a posh car to preparing a menu card of dishes.
- To finance funeral expenses. When relatives die, it’s grief, but funeral expenses are very urgent and, of course, inevitable.
Payday Loans – A Way Out for Emergencies
If you need costs for emergency purposes, it’s time to select online loans same day variant. Such loans are a way-out for those who lack money to finance their expenses before a salary day.
Pros of online loans:
- quick and simple approval process;
- no credit check;
Cons of online loans:
- a high-interest rate;
- full repayment within a short time;
and some more.
To my mind, saving money is better for opportunistic people who want to “soften the blow” for future situations and be ready to overcome financial difficulties at any time. If your income is not enough to be able to save money on a regular basis, loans are your better variant.