Asteria Lending Inc. Unit 305 3/F 6762 National Life Insurance Bldg. San Lorenzo, Ayala Ave. Makati City
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Over the years, we have discussed the idea of “prioritising” when managing your money, but what does this really mean? In this article, we are going to explain what this process can look like and give a few practical examples of how you can make sure you are using your personal loan in the most effective way possible. When deciding which purchases are really essential and which ones are frivolous or wasteful, it can be difficult to be honest with ourselves, especially if we are in a heightened state or are being distracted by life’s inevitable challenges. Here’s Asteria’s guide to prioritising purchases after accepting a personal loan.
Think carefully and most importantly, honestly, about the way you live and what really matters to you. If you have children and a family, the chances are, this will be your main focus. If you are career driven and have a dedication to the job you do, things like personal development and education may be more of a priority for you. Make lists of what you spend the most money on and what you feel you might be lacking. Use bank statements or online banking apps to help you do this accurately. Often, our idea of how we spend our money is quite different to the reality. If you have taken a personal loan with intention of buying a few things, which is quite common, this process will help you to feel more satisfied when you do finally decide to part with your cash.
The way marketing works these days means that people often feel as if they never have enough. This is rarely the case and when we stop to consider what really matters in our lives, many of the marketeer’s slogans and promises can seem hollow and meaningless. When you are thinking about spending your personal loan, understand that you are going to have to set yourself a hard limit in terms of the products you can afford. If you are buying a new car, think very carefully about whether you really need all of the optional extras. If you are paying for redecoration, stick to a budget and try to accept that you won’t necessarily be able to recreate the dream décor of a celebrity style dwelling.
When it comes to making decisions about how to spend our money, there are all kinds of theories available. For those with a great deal of disposable income, the gut feeling, or “impulse” style of spending is commonplace but for everybody else, the process is a little more difficult. Starting with a list is usually a good option as it allows you to visualise your thought process somewhat. If you are thinking of buying a new car, computer, or piece of furniture, make a list of the features you’re looking for and be prepared to compare products quite rigorously. Check reviews online but also ask around for real people’s opinions if you can. Spending a loan is extremely easy to do and making sure that you are getting a product you are going to be happy with is common sense.
Unless you are incredibly lucky, it is unlikely you will be able afford everything you want, even after you have taken out a personal loan. Learning to compromise is one of the fundamental factors in prioritising how you will spend what you have borrowed. If you have taken out a personal loan with the intention of getting a brand new car and a brand new computer, but suddenly realise there’s no way you could afford both, it would make sense to consider one of two options. Do without one of your desired items or consider buying second hand. The right choice in this situation depends on your needs but in most cases, with enough research it should be possible to get something that’s at least close to what you originally had in mind without overspending.
Always consider the repayments and interest rates when you are choosing what to use your loan for. The reason this is important is that it will directly affect the overall cost of what you are buying. Though you will initially only pay the ticketed price of the item because you are using credit, you will also need to factor in the interest when you make your decision. This is why we advise against using salary loans to pay for luxury purchases or non-essential items as the high rates of interest essentially mean that you can end up paying a great deal more than you really need to, just for the sake of having something immediately.
Though we all want all kinds of things, what we need is often far less extravagant than we really think. Using personal loans to pay for products is commonplace but when it comes to prioritising how you are going to spend what you have borrowed; it is important to be mature and responsible with your thought process. Though you may want the brand new, sports version of a vehicle or the limited edition version of a games console, unless you can realistically afford to splash out on this kind of treat, the chances are that you don’t really need it. Exercising restraint is something that all consumers should be mindful of when both borrowing and spending.
This phrase does not always mean what we think. To some people, this would mean getting as much as you possibly can for as little as possible. Though there is some truth in this, quality, rather than quantity, is usually a better approach. Using your personal loan to buy just one item is perfectly acceptable, providing you have taken the time to ensure you are paying for a product that is worth the price tag.
