If you are in a family which is expecting a new baby, then you may be rather overwhelmed with the cost of everything that you will need to buy to provide for it. It is easy to think that a baby will not be that expensive until you start looking at all of the things that you want to buy for them and then you add it up and can panic! You may wonder whether it might be a good idea to borrow the money to buy for everything that you need. It is worth some thought as there are advantages and disadvantages of borrowing.
Advantages of Borrowing
When you borrow money you will usually get to spread the cost across a series of months or even years. This means that you will not have to find the money all on one go. This can be extremely helpful, especially if you do not have the money at the moment.
Borrowing can also mean that you will be able to get items sooner. You will not have to wait until you have saved up for the items but you will be able to get them immediately. This might be something that you have to do if you need things that you just cannot afford otherwise.
Disadvantages of Borrowing
If you are borrowing money then there will be a cost. All loans have interest and there will be fees as well with some. This means that you will be paying for having the loan. You may feel that this will be worth it, but it is a good idea to work out how much you will need to pay and then you can decide whether you are happy with the amount. It can be best to try to find out the monetary cost rather than just the interest rate as this will be an easier figure for you to deal with and work out whether you feel that it is worth the money.
You will usually have to make repayments on your bad credit loan each month. This means that you will have this commitment to paying out money and it might be something that you find difficult. Many of us are used to having financial commitments like rent, utilities etc and so another one may not be a problem but it will depend on the amount and whether you think you will have enough money to cover it.
When you have a baby there will be new things to buy them at different stages in their life. This means that you may feel you need to borrow again. If you keep borrowing money you will get to a point where you either cannot afford the repayments or run out of people that will lend to you.
So, it can be a bit tricky deciding whether to borrow or not. Do make sure that the first thing you find out is how much you will be expected to repay and when. This will help you to decide whether you can afford the repayments and therefore whether you can afford the loan. Then you can think about the pros and cons and decide whether it will be right for you. It is worth considering whether what you plan on buying with the money is really necessary and if so, whether there are alternative ways to get the money.
If you do decide to borrow you should make sure that you compare different types of loans to make sure that you choose the one that is best suited to your needs. Then you need to compare different lenders to make sure that you are picking the one that gives you the best value for money.
If you are looking for a new car then you might feel that you would like to pay for it in cash. This can be the only way you can pay for a car if you buy it from an individual and even if buying it from a dealer you might be keen to avoid the costs of borrowing. However, saving up is not that easy for many people, but there are things that you can do which will make it easier for you.
It is a good idea to make sure that you stay motivated to save up money. It can be a good idea to write down your goal i.e. how much you want to save for a car, and stick it somewhere prominent to remind yourself. This means that if you ever get in the situation where you feel like you are getting a bit bored with saving money or want to use some of your savings to treat yourself to something, this will be a reminder as to why you are doing it. The quicker you save, the sooner you will be able to buy the car that you want and that should hopefully help to keep you saving.
Save When You Get Paid
Many people will put any money that they have left at the end of the month into their savings account. This means that if they spend a lot of money there will be nothing left to save. Although it can be good to do this and put spare money into your savings account, it can also be wise to put some money into the account as soon as you get paid. Set up a direct debit to do this. Then you will know that you will always save some each month and you will need to budget carefully to make sure that you can manage on the rest of the money that you have available to spend. It can force you to think more carefully about what you are buying.
In order to have more money available to save then you may need to reduce what you are spending. This can be easier than it might seem initially. It is worth starting by considering everything that you buy to see whether you can spend less on them. For example, you may want to compare insurers, utility suppliers, mobile phone providers, supermarkets etc and see whether you can switch to a cheaper one. For some things you will hardly notice any difference and just a small amount of time researching could save a significant amount of money. You may also want to think about whether it might be a good idea to reduce the amount that you are buying as well. It could be the case that you are spending quite a bit of money on luxury items and you can cut down on these so that you can save more.
Another option could be to look for ways to earn more money. This can be more difficult sometimes but there are lots of ways that you can earn money. You can do extra work in your current job but alternatively you might be able to find some ways to earn online or some temp work which might suit you better. You may find this work is less well paid but it can be worth it if it gets you the extra money that you need more quickly. It is good to have a think about what time you have and what sorts of things you would like to do so that you can find a way to earn that will suit you and your lifestyle.
A store card is rather like a credit card but it is used to pay for items in just one particular shop or a set of shops all owned by the same parent company. Many larger stores offer them and they can be useful because you might get discounts or other advantages because you own one. Like a credit card, you get the option of repaying the card in full or just repaying a small amount. There are prod and cons of doing each.
Pros of Repaying in Full
Repaying the card in full will be the cheapest option available to you. It will mean that you avoid paying any interest or charges and therefore you will save all of that money. The cost will vary depend on the specific store card that you have but you will tend to find that the interest can be pretty high, especially compared to other ways of borrowing.
It can also be good to know that it is paid off. Some people like the feeling of knowing that they have repaid their card in full and that they will therefore be able to use it again without worrying about the cost of paying off things that they paid for on it previously. They may just use it for the offers they get for being a card holder and because they get interest free credit on items, they buy with it as they do not have to repay them immediately. If they repay the card on time, there will be no charge and therefore you can consider it to be interest free credit.
Pros of Repaying Small Amount
Repaying just the minimum amount means that you can spread the cost of the item that you have bought. You will not need to find the money to pay for it all in one go but you will be able to pay for it over a series of months or years. This could mean that you will be able to use the card to buy something that you would not have been able to afford otherwise and then take your time in paying for it afterwards.
If you have other loans that have higher costs than the store card then it will be better to spend more money paying them off first. This will be more cost effective and then you can pay this store card off once the more expensive loans are repaid.
It is worth remembering that there are other options when repaying a store card apart form paying in full or just paying the minimum. It is possible to pay any amount back between these two amounts. This means that even if you want to repay in instalments you do not have to repay the minimum but you can pay more. This means that you can still spread the cost but you will repay it more quickly than if you only repay the minimum as the minimum may only cover the cost of the interest and not much more.
So, whether you repay your store card will depend on your situation. Think about whether you want to get the loan repaid quickly and whether you can afford to repay it all in one go. If you can afford to repay a bit more and want to repay it then you should do so. If you want to repay it but do not have the money then you should work out whether there is a way that you can get more money, either by earning more or spending less which will help you to repay more.
There are many ways that we can cut down our spending but food can be something that many of us buy and might wish to spend less on. There are different things that we can try to reduce the costs though. It is good to think about whether you might like to try one or several of these things to reduce how much you are spending.
Use a Cheaper Supermarket
There are many different supermarkets and they vary in how much they tend to cost. Most people will know which ones will be the cheapest and which will be the dearest, however it can depend on what sorts of things you buy. You will obviously find a low end one will be much cheaper than a high end one but if you are switching between two lower end or a middle or low end you need to be careful to make sure that they really are cheaper. Sometime they could be more expensive than you might think. Make sure that you check the prices carefully so that you can be sure that you really will save money. You will tend to find that some items will be cheaper in some supermarkets and others in other supermarkets so there will not be one that is cheaper for everything. You may therefore decide to go to several, but this could cost money in petrol which might be than you are saving on your food bill.
Buy Unbranded Items
Many people buy big brands thinking that they will be better. However, you will tend to find that the generic or supermarket brands could be just as good, if not better and they will very often be cheaper. Take time to compare the prices and think about whether you want to change to a different brand or just try it and see what you think. With food, it is good to try different brands and types because it is not too costly if you find you do not like it. You may just eat it anyway or you might throw it away but you will not be wasting that much money and if you end up saving money on quite a few things it will be worth it.
Use Reductions Effectively
Often supermarkets will have sales and reductions. These can be useful as you can save money on things that you regularly buy. However, you can also find that you might be tempted to buy things that are on offer even if you would not normally buy them. This means you can end up buying extra things and you could end up eating extra food than you need and wasting the money and possibly put on weight as well. So only buy things on offer in replacement for food you were going to buy or if the offer is on food you were going to buy anyway.
Use a List
It can really help to make a list. Think about what food you will need and use and just buy that. While at home you should be able to check what you are running out of and what you need for meals that you will be making in the near future. By doing this you will avoid buying more than you need and wasting food that might go out of date before you get a chance to eat it. It may even be sensible to plan what meals you will make so that you buy the right food, unless you are the sort of person that will be happy to make a meal based on what food you have left.
Most of us will have some sort of home insurance. It can be expensive though and you may even be tempted not to have any at all because of the cost of it. However, it can be better to see if you can find ways to reduce the cost of the insurance rather than go without it at all. Then you will have the peace of mind of knowing that you have the cover without having to pay so much money. There are a few things that you can try.
Changing the company that you are insured with can reduce the premium that you are paying. There are often cheaper companies that you can use. It is worth being careful though as you will need to be sure that you are getting the same cover with a cheaper premium. Make sure that you are aware of what you are being covered for currently and then when you look for a quote from someone else, make sure that they will cover you for the same things. It can also be worth finding out a bit about the insurer and how good they are at paying out if you make a claim.
Negotiate with Current Insurer
Some people do not like the idea of using a different insurer. This could be because they do not trust other insurers or they think that it will be too difficult to swap. Although there are many trustworthy insurers out there and it is not hard to swap, if you are not prepared to then you may be able to pay less even with staying with your current insurer. If you give them a call and ask them if they can reduce the amount that you are paying, they may just do so. Many will just do it when asked, you do not even have to threaten to leave or explain that you have seen cheaper quotes elsewhere, although having details of a cheaper quote could be useful.
The excess is the amount of money that you will have to pay when you make a claim. Most insurance companies will say that they will only pay out money if you pay the first £100. This means that you will not make claims for lots of little amounts. The amount of money they ask you to pay will vary and if you ask them, they may raise it and this could save you money. Do make sure that it is an amount that you can afford though. For example, if the excess is £500 and you need a repair that costs £600 then you will only be able to claim £100 towards it. So, the amount that you can afford it to be will depend on how much you think you will be able to afford.
It is also worth checking with your insurer what you are covered for. Sometimes you can change what you are covered for and change the cost. For example, you might be covered for accidental damage and if you take this away it could be cheaper. There may also be the option of having legal cover which you could go without to lower the price. It is worth discussing this with your insurer so you can carefully decide whether you think these things are worth having or not. For example, you may want to take away cover for items that you take out of the house as you may not take anything out of the house. So, make sure that you find out whether you use everything that you are covered for and if not, whether you can reduce the cover.
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