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5 Financial Rules for Loans and Life

Saving and making money is not an impossibility, it is something that all of us can do with regular practise.

Pay more than the minimum loan amount

While most people are happy to be paying back the minimum set repayment, that is not the way to financial freedom. If it is possible for you to pay back more then it is strongly advisable.

Interest is added daily on your loan so the faster you can reduce the debt, the less interest you will pay, the more money you will save.

Work out the use cost

It is understandable that people will try to get a bargain, when making a purchase.

For example, when searching for a new pair of shoes, the bargain shoes can end up costing us more in the long run. The poor quality of some products, means we end up buying those products again sooner than we would otherwise.

What we should think about, is how often do we use that product and then work out our daily use cost.

Don’t buy a new car

The average new car loses 30% after the first year, this can be a considerable amount of money to lose. Buying new is always great, but wouldn’t you want the extra money saved in your pocket?

Modern cars are more dependable than in the past, so buying used does not have the stigma it once had. It is not uncommon to see older cars do well over 100,000 miles with regular servicing.

Refinancing your loans

Most people don’t realise that the loan they have is not the loan they are obliged to keep.

For example, if you have credit card debt with a high rate of interest, you can transfer that debt onto a new credit card offering a 0% introductory rate. Our own Switch Saver has helped people transfer logbook loans onto a cheaper rate.

Satisfy your needs, not wants

We have several basic needs, from food to shelter, and until we are in a better financial position we should look to primarily solving our needs and not wants.

Catering to our wants often involves an impulsive act that often leads to disappointment and less money in our pocket.

No one ever regretting paying for a roof over their head, but thousands of people regularly regret their non essential purchases every day.

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