Should you get a loan to solve your money problems or not?

Sometimes, you will find yourself in dire financial straits where you need relief as quick as you can. You may have to take a loan to get you out of this predicament, but the voice of wisdom says that not all money problems should be solved with a loan. You have to consider the importance and urgency of the situation before you dive right into debt.  For instance, if your child or your spouse is suffering from a health ailment that can take their life away, you can apply for a loan to pay the medical bills if you have no money. Another instance where you could take a loan is if you have accommodation issues. You would not want to be homeless or be a source of inconvenience to others. Take note that your current predicament does not have to be the same as those instances described above, but they should have the same quality of importance and urgency. It would be wrong for you to take a loan so that you can be the best dressed at a friend’s wedding, or because you want to impress some people with an affluent lifestyle you never had in the first place.

Also, you should consider your financial capacity before taking a loan, especially when it comes to matters that are not of much weight. Never take a loan you cannot pay back. You should look for other ways to solve your money problems. It would be a shame for you to lose what you have to creditors because you bit more than you can chew.  However, there are countless ways to solve your money problems without having to get a loan. Some of them are :

If what you need money for is not urgently important, consider pulling up a savings account for it. In light of when you are going to need the money, draw up a plan on how you would save for it. You may need to let go of some benefits in the process, such as going on a treat or stopping a subscription-based service. For instance, you can decide to set aside a certain per cent of your income every month. If you know you cannot do this on your own, try having an accountability partner who will hold you to your commitment. Whoever you choose must be trustworthy, you do not want someone that will run away with your money. Another method is to use a tech tool to automate your savings. This way is more efficient and trustworthy than going for the former option. There are lots of savings apps you can choose from. There are several ways to save money that you might want to consider.

This is one of the best ways you can get money to get to solve your money problems. This is because at the end of the day, you do not owe anybody and you get to do what you want. Check out with your family and friends; some may want to donate to help you after listening to your story. This is another reason to have a   valid  “why” for opening a fundraising account. Many people work hard for their money and they do not want to lose it carelessly. So you need to sell to them a good story if you want their money. Try telling your friends on social media to support you as well. However, this is optional, but if the amount needed is high, you should do to garner more support. You can also write to charitable organizations, etc to bail you out.

Business/returns of investments

If you have invested before when you need the money and the problem is not urgent, you can wait for your investment to yield returns and use the extra money to tackle the problem. However, you must have invested before that and your investments must have matured. You cannot invest today and expect to start reaping tomorrow, except you are involved in a Ponzi scheme. Another way to solve your money problems is to use the proceeds from a business. However, you must be very strategic about this. You cannot afford to spend your capital or else your business will crash, neither should you spend your proceeds every time as you need to invest part back into growing the business. If you would be solving your money problems using business profits, ensure it is a mature business. Do not put such a heavy weight on a new business lest it collapses.

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