Things not to finance with short term loans

By: admin

Neither a Borrower Nor a Lender Be

Good old Shakespeare famous phrase said by Polonius in Act-I, Scene-III in, Hamlet.

Polonius counsels his son Laertes before he sets off to Paris:

“Neither a borrower nor a lender be; / For loan oft loses both itself and friend.”

What this means is never borrow money from a friend because if you don’t pay it back you will lose a friend and if you lend money to a friend you will lose your money and your friend.

Does that mean borrowing money is a bad thing to do? simply put, it depends what you are borrowing the money for.

Everyone will borrow money are some stage of their lives. What matters is what you are borrowing money for.

If you were to list all the things you would love to buy today if you won the lottery, we can expect the following to be on that list:

  1. Luxury holiday
  2. Wedding
  3. Sports Car
  4. Blow out party
  5. Big house in the country

You may have other ideas such as paying off loans, mortgages, helping your friends and family pay off theirs.

Let’s consider the situation closer to home, where there is no lottery win. Which of the items in the list above would you consider taking out a loan?

The only one in the list which would make any financial sense is Number 5: The big house in the country, why, because property is something which is less likely to depreciate and could be considered an asset if you were to hire it out for wedding venue, or setup a country B&B.

All of the other items listed above a liabilities which will cost you money and ultimately you will have nothing to show other than a hangover and some lovely pictures, even the sports car will depreciate (Unless you have just bought a rare Ferrari)

Weddings

Considered to be the biggest day in most people lives, the day you seal the bond with your loved one.

According to this article in the independent the average wedding in the UK now costs £30,355, according to Bridebook.co.uk’s National Wedding Survey 2018, up by £3,365 – or 12 per cent – from £26,989 the previous year.

That’s £30k, 30 Monkeys to use cockney slang. THIRTY THOUSAND POUNDS!! Let that sink in.

The church, reception, transport, wedding dress, stag do, hen night, honeymoon. Before you know it, you are swimming in bills.

Many young couples just starting out may still have university student loans to repay, and maybe they are saving up for a flat or house and now they are looking at a momentous bill for ONE DAY. Sure, you might say it is an important day for the blushing bride.

Now we don’t want to be a kill joys but according to The Office for National Statistics (ONS) estimated in 2012 that 42% of marriages in England and Wales would end in divorce. That’s the latest estimate we have of the likelihood of married people getting divorced over the course of their lifetime.

We are not saying don’t get married, not at all, marriage and families are the basic building block of our great society without which we would all be listless drones with no roots. We are saying simply do you really need to spend £30 large on one day?

How not to sink into Wedding Debt

If you have rich parents who can foot the bill easily then power to you, but most of us don’t. Therefore, what is the solution? Simple, budget your wedding day. Can you get married in a registry office? can you have your reception in the local restaurant? if you can then do it.

It will come in at a fraction of the cost and all that cash you would have had to pay back in interest is now going towards a deposit to purchase a real asset, ultimately if you love each other it won’t make a jot of difference how much you spent on your wedding day.

As the old saying goes, “any fool can get married”

If you are still married in 20 years’ time, then have the blow out party then when you can afford it.

And above all do not take out a short-term loan to pay for a wedding

Can You Delay the Big Day?

In today’s “modern society” couples live together for years before getting hitched. What matters is family, being married is nice on paper but what difference does it really make?

If you really have your hearts set on walking down the aisle to your betrothed then plan well in advance, put aside at least 10% of your monthly wages into a special saving account and in a few years you will have a nice pot of cash without the need to borrow money.

Who knows, by then you might decide to use the money for more productive ventures, open a business etc.

Dad Can Foot the Bill

It has been tradition that the father of the bride will pay for the wedding. Now we are all for tradition but honestly as a father myself I have no intention of shelling out 30 grand for a one day.

Not going to happen, will never happen. I paid for my own wedding and I expect whomever decides to take my daughters off of my hands to do the same.

I have established my own tradition. So, my advice to any would be suitor is, man up and cough up!

I am sure as bears poop in wooded areas that I will not be getting myself into debt by borrowing money either for the day.

Sell, Sell, Sell.

Another way to fund your big day is to start selling off your collection of rare Beetles LP’s (This is how old we are here), or your limited edition star wars figurines you’ve had since you were knee high to a grasshopper or and it pains me to say it but you might even decide to sell your beloved motor just so she can buy a dress which will be worn the once.

We do not recommend this, not one little bit. Sure, sell old clothes, unused items you don’t use any more but stripping yourself to the bone is not something you will be happy about in the months and years following your wedding day.

Cut your Cloth

Do you really need to invite 500 guests? Does your 14th cousin removed on your mums’ side really need to be there unless of course they saved you from that burning build that one time.

As much as we would love every Tom, Dick and Harriet to be there on our big day we would always suggest to invite those people who are directly important to you, parents, close relatives and friends (And don’t forget the rich auntie with the priceless Ming vase)

Hold your reception someplace other than Windsor castle or the moon. It has become fashionable today to tie the knot in ever increasing unusual locations.

We have seen people get married underwater. Frankly no one likes these people, but they exist, and it makes others feel like they have to keep up with the Joneses.

Our advice is don’t, there is nothing wrong with a small church service and a modest reception. Your family and friends will be there to celebrate the happy occasion even if it is in the back of the local pub or your front room.

Going out, out.

Should you borrow money for a night out on the town? Errr….let’s think about that for a moment…..of course not.

How could this be a good idea. The only time I would recommend borrowing money for a blow out is if you are 100% certain that tomorrow the earth will be hit by a meteorite and all life on the planet will be wiped out or the aliens will arrive and enslave us all, then we say fill yer boots!!

Barring E.T coming for tea or space rocks, other than those two remote corner cases we would really not recommend borrowing money just so you can act like some sort of gangster rapper in the local razzle night club

Vacation

Or holidays as we call them here in the civilised world. Should you take out a short-term loan to finance 2 weeks in the sun?

Well, this is a toughie. We all need a break, if you don’t stop and rest and allow your mind and body to recover from a year of sitting at your desk pretending to work then we are ourselves borrowing from our future selves.

It is tempting don’t you think, the sun, the sand, the lazy afternoons laying on the lounger by the pool with mojito (I don’t care, I like mojitos) in one hand steak sandwich in the other.

So, should you borrow cash to finance a holiday? We say no, don’t do it. Once the holiday is over you still must pay back the loan.

We recommend if you cannot afford to fly off to foreign shores to have your wallet/bum pinched how about a “stay-cation”, there are lots of things to do locally. Just pick up the local rag, there are always listings of local events. Some are free some are not so free.

The only thing missing as Wham once sang is the sea.

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