Save Money Or Borrow Money Always select loans that have a high interest rate and tried to get rid of them as soon as possible because of the high interest private loans if they were the same for a long time will cost you a lot in spite of the monthly may not look you in charge of the matter.
The Step 2 Wealth Review and question that arises a lot of times when what have some extra money, you are paying some of your debts or save that money and invest it until you need in the future? It is the same question that will face if you need to buy something, you tend to use your money that hoard it or recourse to borrowing? Know us through the following article for any solutions may be right for you when it comes to a choice between saving or borrowing.
Borrowing or savings?
As a result of the need to meet the needs of ordinary life such as searching for owning a home or buy a car, sheltering individuals to borrow from financial institutions to get the appropriate funds on a reimbursable basis this amount Halal specified period of time, by paying a sum of money to this institution on a monthly basis and in return for interest agreed. There are many types of loans that differ in terms of size of the loan, repayment period, and the interest rate.
For example, consumer loans are where the maturity period of loans small compared to own real estate, while the interest rate on buying your purposes by credit card is too high compared to other types of loans. So before you decide between recourse to borrowing or the use of your savings in the acquisition of your needs, or what you need to do when you have an extra amount of money, you have to know the total cost of each loan, and then compare the returns expected from the private Richard Williams Step 2 Wealth account the process of saving. By way of illustration follow us the following example:
We will assume that you have a local bank savings account worth $ 2,000 and an interest rate equal to 3%, and you’ve earlier borrowing from the same bank an estimated $ 2,000 with an interest rate equal to 20%. With the end of the year will be the cost of the loan granted by the bank Eyak is 400 (0.2 * 2000) dollars while will have you gained from your savings account back up to $ 60 (0.03 * 2000). In other words, you still have to pay the value of $ 340 (400-60) Any difference between the cost of the loan and the yield savings account.
The bottom line is, that if you use the amount set by the savings account to pay your debts to the end of the year provided a total of $340 (the amount that you need to pay the bank Discounted him yield savings account). In general, the cost of borrowing always be higher than the interest rates offered by financial institutions on bank deposits and other savings accounts ratio. This is because banks and other financial institutions that grant loans depends on the Step 2 Wealth profit by granting loans at a higher rate of interest which gives customers the savings accounts interest rate business model.
– Always select the loans that have a high interest rate and tried to get rid of them as soon as possible because of the high interest private loans if they were the same for a long time will cost you a lot in spite of the monthly Dfoatk may not look you in charge of the matter.
– Always avoid borrowing excessively, sometimes pushes you may want to own a certain thing to go into debt in an exaggerated manner. Although it is almost impossible to avoid borrowing from banks, try as much as possible to give yourself a good time to look for the best option for you with regard to financial institutions. And tried to do calculates the cost of the loan accurately to know the true size of the loan at the end of the maturity period.
– After getting rid of high-interest rate loans, then saving the remaining money in savings accounts, you generate a return similar to bank deposits certificates or other savings accounts, which may vary from state to state, even though the interest rate may not be high, and may not exceed 3% on an annual basis to it Sthamik of inflation and the decline in the value of money over time.
– Be sure to avoid borrowing through a credit to your card (make purchases when they do not have the balance), although the credit card used for the acquisition of consumer purposes not be of high value, however, the interest rate may be too high has sometimes up to 20 % in some countries, so always know the size of the cost of each operation.
– Create a savings urgent situations that may occur from time to time and that is not unexpected expense, you may need a plane ticket to travel, or repair something goes wrong in your home, a small savings special expenses unexpected expense will protect the asylum external borrowing.
– It is very important to have a sound financial condition, that is, you know how to manage your Money and expenses so that you have some extra money for an emergency, because the development of a permanent plan to manage your expenses and Mdackhelk will avoid falling into financial difficulties in the future.