Saving is hard to do, especially with so much distraction and push from the media to buy things as “retail therapy” or to “heal one’s inner child”. Even the very social media platforms that we use to communicate have become a tool for marketers and advertisers. Online shopping apps make it so easy to spend. While some can still draw the line between overconsumption and healthy stress relief, the lines are becoming blurred as technology advances rapidly.
In addition to the temptation brought about by the accessibility of online shopping, there are other factors that make it harder for people to save. The rising inflation rate results in higher costs of living, and emergencies such as illnesses, accidents, and property disrepair further serve to hinder efforts to stash away money.
Thankfully, there are many ways to save. One of those is through loans from an authorised money lender. It may sound counterproductive, and there’s also the fact that not all loans will help you save money in the long run. However, with the right attitude, habits, and loans, it’s very much possible. Here are the ways
It Helps You Kickstart the Saving Habit
Look at it as a way to force you to set aside funds after you get paid. The loan proceeds will serve as a kind of advance savings. Instead of setting aside a portion of your income every time you receive it, you’ll have a lump sum of money you can deposit into a bank account. By reversing the process, you have no choice but to set aside money and not spend it all on things you think you need.
The catch here is to make sure you do not dip into your savings account for things you would have spent money on if you did not commit to a loan obligation. You can ask your bank about short-term time deposit accounts or other products that will keep your money locked in the account and not readily available.
It Can Make You Reevaluate Your Income Sources
Naturally, when you apply for a loan, a portion of your income will no longer be available for whatever you want to spend it on. You will have to allocate for the amortization, otherwise, you will incur late charges and penalties. You can use this to motivate you to look for opportunities to earn more money. If you really want to go out to dinner at least twice a week, you will have to find a way to pay for it.
Make a list of the skills you have that you think can be translated into a side hustle. Take into consideration your existing workload and schedule to ensure you will not be sacrificing some responsibilities along the way. Look for income streams that can be done easily or even passively. Use your cravings for pricey food or new things to propel you to become creative and resourceful.
It Can Motivate You to Invest
A loan comes with a lot of risks. Aside from the interest payment which you pay in addition to the regular payment for the principal obligation, you are also exposing yourself to collection cases if you fail to pay on time. You should be able to identify these risks and come up with realistic measures on how you can mitigate these risks and avoid financial ruin.
What is the value of exposing yourself to such risks? Well, it forces you out of your comfort zone. Once you have experience in dealing with loan risks, dealing with investment risks will no longer be entirely new to you. Of course, you should conduct thorough research and study the features of investment products you are considering before availing one. Savings accounts usually do not yield considerable interest. It would be beneficial to allocate some of the loan proceeds you will receive to investment products. Start with something small and low-risk to build up your confidence and hopefully, your portfolio.
Conclusion
Loans aren’t exactly known as a way to help you save money, but with enough creative thinking and discipline, it’s possible to do just that. Follow these steps or come up with your own – what matters is that you get to keep much-needed money stored for the future.
