Money-skills

6 Reasons Short-Term Loans Could Be A Better Way To Borrow

Short-term loans have received a lot of bad press over recent years. This was mainly as a result of exorbitant interest rates, administrative fees and other costs. Yet for many, a short-term loan is a viable option to get out of financial trouble. Here are six reasons why you might need to access a short-term loan.

The bargain of a lifetime 

Holidays are always important. If you’ve spotted a travel agent’s deal that’s too good to miss, then as long as you’ve done all of the sums and know that you can afford the repayments, a short-term loan will prove to be a welcome solution to any cash strapped shopper. Why not click here to see if you can afford a logbook loan. Unlike payday loans, you can repay the amount borrowed in small regular amounts until the debt is repaid.

No one wants to be locked into a debt 

If you’ve borrowed money, you don’t want to be locked into a repayment schedule that will prove costly and possibly inconvenient. You may even forget why you took out the loan in the first place. According to the website Money Saving Expert if you shop around you can still access a cheap short term loan, this might be through 0% introductory credit card offers or even a 0% overdraft rate with a new bank account. As long as you can prove that you have a good credit rating, this type of offer is the ideal way to source a short-term loan.

The future is always a mystery 

If you’ve worked out your budget for the foreseeable future and you are confident that you can meet your loan repayments, then a short-term loan is perfect for most purposes. No one has a crystal ball. Illness or accidents, or even recessions can occur at any time, so borrowing for a short period of time may be safer than a long-term debt.

Manage your debts 

A recent article in The Guardian highlighted the dangers of debt. Non-mortgage borrowing has reached a staggering £10,000 per household across the UK, or £239 billion in total and this figure is set to grow. This figure does include unavoidable student loans, which amounted for £9.1 billion of the £19.7 billion increase in 2014, and personal debt including loans and overdrafts amounted to £6.4 billion. If you want to manage your finances, a short-term loan that’s repaid within a fixed term may be your best option.

You need money quickly 

If you need funds in an emergency and don’t have time to wait for a bank’s decision on an overdraft, or your credit card is maxed out, then a short-term loan is perfect. You’ll be able to respond to the emergency and repay the money in over a short period of time.

Always read the terms and conditions 

Loans vary from company to company. Despite new regulations governing this financial sector you’ll still find that some loans are more expensive than others. As long as you understand the repayment schedule and all of the connected charges, then this type of loan can bail you out of a difficult financial situation.

June 1, 2015

Teaching Kids Money Skills

Most of us would admit that our finances could use some improvement. We weren’t brought up with good money skills and that’s what makes teaching our kids about money so challenging. But even if you don’t feel like a money expert, don’t be discouraged. Whether you realise it or not, you have acquired a lot of money wisdom you can pass on to your children to give them a good start in life.

RELATED: 7 Modern Money Lessons You Need To Teach Your Kids

Talk about money

Explain to your children what money is as soon as you can, as well as the different forms money can take – cash, credit cards, bank deposits. Let them watch you pay at the shop and later outsource the payment to them. They’ll love it and they’ll get to practice their maths, too.

It’s also important to teach them where money comes from (it’s not from the ATM, like my son used to believe). When children understand that people pay you money because you have contributed in some way to make their lives better, they see money as a fair exchange rather than endless supply.

Play money games

Kids love to play shops. Parents use this game to teach their kids new words, but it’s also a way to model money transactions. My kids have a price list for all kind of items they sell at their shop and we use play money to purchase them.

Monopoly is a great game for older kids. It will take their understanding of money to a new level and it’s fun to play for adults, too.

Encourage saving

Take the kids to the bank to open their own savings accounts – it will make them feel all grown up. Have a piggy bank at home, too, for easier access. When they receive money, remind them that saving it (or part of it) is an option and that not spending all their money immediately will help them buy bigger things later on.

Allow buying decisions

Let your kids take responsibility for their own spending every now and then. You can discuss with them the pros and cons of each decision, but leave it up to them, even if you think they’re making a mistake. Sometimes mistakes are the quickest way to learn.

Work on your own money skills

When you’re getting better at saving, budgeting, managing your debt and making the most out of your money, you’re modelling these money skills for your children.

Image via Pixabay

April 3, 2015