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How to make the most of your Loan

By: admin

After having been approved for a loan and having the money in your hands it can be tempting to spend it on things other that what you intended to use your loan for.

There are many temptations out there, it is almost impossible to turn on the T.V or radio without being bombarded with one offer after another. Each advert promising to improve your life somehow.

We see our friends, family or complete strangers sporting the latest shiny object from Apple or Samsung and we feel that little pang of jealousy. Why can’t we have it too. It’s only £50 a month away from your hands and when you think about it what is £50 a month right?

You start doing the mental arithmetic and manage to convince yourself that it works out to only £1.60 per day which is less than a cup of frothy coffee from the local Starbucks.

When you look at the numbers in a different way that £1.60 per day is almost £600 per year. That’s a big hunk of cash. If you are earning £24k per year after tax then £600 is 2.5% of your annual income, even more if £24k is your wage before tax.

Now consider the amount of cash you spend each day on those little things like coffee, crisps, sandwiches, the odd pint or glass of wine you will start to understand why at the end of the month the bank balance is looking worse for wear.

So, when you do get your loan it is important that you budget the money for it to last longer and to serve its purpose. Here are a few tips on how to do that.

Budget your Loan Accurately

When you get your short-term loan, it is important that you understand that this is not free money. You will have to repay the loan according to how you arranged it with your lender.

Start by writing down a budget as to what you are going to use the loan for. If it is for food shopping, then list the items you will buy and try to avoid being tempted in the supermarket to add to the list. Buy only what you need.

Write down all of the necessary expenses you have to pay during the month, the ones that you have no choice but to pay. For example, and this list is not exhaustive:

  • Council Tax
  • Electricity bill
  • Gas Bill
  • T.V Licence
  • Internet
  • Car insurance

Then list out all your expenses which you can choose to cancel, these being the obvious like:

  • Gym memberships.
  • Streaming Channels like Netflix or Amazon.
  • Any other subscriptions you may have.
  • Buying drinks and food when out.

At first it might seem a little harsh to have to start cutting out various subscriptions, but do you really want to waste your life away sat in front of the T.V

Shop with a budget in mind

Before you head out to the shops make sure that you have that shopping list prepared. If you know the layout of your supermarket it might be an idea to list the items you need in the order that they are laid out in the shop so you always follow the same path and don’t find yourself wondering down some new, mysterious aisle with temptations on either side.

If you must take out a payday loan to pay for your daily expenses, then planning down to the last pound and penny will help you get into the habit of only buying exactly what you need.

Buying the big chain own brand produce might not taste as great as the premium brands but it might be the difference between doing into debt and being debt free in a short while. (I myself have been there and it was worth the sacrifice although my taste buds have never forgiven me)

Avoid the Temptations of the Internet

Not only are we bombarded with an avalanche of ads on the telly but it’s even worse when we go online. Every website seems to be wallpapered with adverts all eyeing up the coppers in your pocket like ravenous wolves.

Sites like Amazon, eBay, Argos have engineered their entire systems to make purchasing so simple that all you need to do is press a few buttons and that new-fangled shiny gadget could be in your hands today if you order now.

In the old days to purchase something from one of these online stores required many steps, you had to type in your address, card details the lot.

Now those steps have been whittled down so that people can buy on impulse more often as it is less of a hassle with just a few clicks of the mouse button.

Such sites have all your details, your credit card information is on file and they know exactly what you like and will target you with products that they know you will buy.

Avoid the temptations of on-line shopping by applying the same principles of shopping on the high street by having the discipline to walk away from unnecessary purchases.

Once your finances are back on an even keel and your bank balance is looking healthier at that point you can afford to treat yourself to the odd luxury.

An easy way to control your spending is to remove your credit or debit card details from the likes of Amazon so it is more or an effort in the future to make impulse purchases. And avoid click bait adverts by browsing in incognito mode so that you can also avoid targeted ads being shown.

Time to give up the luxuries

Maybe if we were to look closely at our outgoings, we would see that one of the reasons our finances could be in better shape could be to do with the little things which we spend our money on.

Going to the pub nowadays is not how it used to be. In my younger years a tenner would go a long way, today a tenner won’t buy even 2 pints in some pubs in London. A night out could leave you and your bank balance worse off in more ways than one.

Sure, we can bemoan the demise of the local boozer but who can afford to spend £20, £30 a night on drinks. Television shows like EastEnders or Coronation street have got it into our heads that the universe revolves around the Rovers Return or the Queen Vic, you wonder if all those characters have got money trees growing in their gardens or if they all invested in Bitcoin.

It Is just the same to buy a big box of beer from the supermarket and invite your friends over for a drink and a chat.

Another luxury which you might consider cutting out is the gym. Like the contract for the new model of phone, the gym membership is something which most people could replace with a brisk walk twice a day, if you also cut out the booze then your health will generally improve.

Scale down on the mobile phone contract too if possible. Do you really need the latest and greatest phone? My phone is over 5 years old and is showing no signs of packing in. Although the problem I now have is most apps will not work on it but so long as I can make/take calls and WhatsApp still function then I am happy.

Make your own lunches to take to work. Avoid buying snacks and coffees on the way to and from work. One thing I used to do every evening was to make more than I need so I would have food for the next day to take to work.

Always be on the lookout for vouchers and discount codes. Using all the tips above will ensure that any loan your have taken out will go further than you imagined. Over a little time, you will be so used to working to a budget that your bank balance will start to improve.

Switch off those lights

They used to shout this during the blitz in the second world war so that ze Germans flying overhead at night looking down would see nothing but darkness therefore less chance for them to know their position.

That also applies today, obviously not to thwart the efforts of high flying Junkers but to reduce your energy bills. If you are not in the room, then switch off that light.

It might seem silly to have to switch off the lights all the time but here is a question, would you hand over 5p to a stranger every 30mins every day for no reason? Of course not, then why leave your lights on, it is tantamount to the same thing.

By the way if you are with npower as your electricity provider all your money is going to ze Germans. So, switch off those lights.

EDF is owned by Le Frenchies and Scottish Power is owned by Los Spanish. If you want to keep it British use Centrica. I am with Los Spanish atm ? with plans to mode to Centrica soon

How you can reduce energy spend easily:

  • Switch off lights you do not need
  • Turn off your T.V at the mains, do not allow devices to be in standby
  • Buy energy-saving light bulbs
  • Turn the thermostat down a few degrees
  • Insulate your home correctly

Cashute as passionate about helping people to become debt free and financially responsible. Our articles we hope will help you make the most out of your short-term loans

Debt management agencies are regulated by The Financial Conduct Authority

Many people in the U.K struggle with debts and many do not know how to start to repay them speaking to a debt advisor is one of the best things you will do along with taking action yourself by speaking directly with your creditors.

https://www.nationaldebtline.org/ and https://www.moneyadviceservice.org.uk

 

You should always seek professional advice when handling debt problems. Cashute are not licensed debt advisers and any information contained in this article should not be taken as legal advice. It is your Responsibility to seek out correct legal advice

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Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk