Are you having trouble making ends meet?
There are several good reasons to get a loan, like financing your education or your business.
Before you decide you need a loan, be warned of these 5 mistakes.
It can be hard to get your finances in order on your own.
Not everyone can pay for their education or their business totally upfront. Regular people usually need a loan in order to get their lives set on the right track.
We’ve already told you how you can make changes in your everyday life to stay out of debt. But what if your money troubles are too big to overcome on your own?
Chances are, you need a loan. So what are some spending habits you should avoid once you get approved?
Here are the 5 money mistakes you don’t want to make.
Buying Things You Don’t Need
Listen, there are so many things that you could buy in the spur moment that could bring you instant gratification. But do you really need to make those purchases right now?
This is the quickest way to find yourself in debt, and may even be the reason why you need a loan in the first place.
Who knows what the ramifications can be further on down the line for some stupid purchase you made on the fly.
Basically: don’t be like Nicholas Cage.
Keep a level head and only make purchases that make absolute sense for you and your current situation.
By doing so, you can stay out of trouble and more importantly, out of debt.
Not Going With the Cheapest Option
Our culture can put a huge emphasis on consumers to always have the next best and shiniest thing on the market. But this way of thinking can be a slippery slope and can leave you with perpetual empty pockets if you are not careful.
If you absolutely need to buy something or replace something you already own, make sure to shop wisely and search around for the best possible deals.
For example: If the car you own is a few miles from finally kicking the bucket, does that mean you need to go out and buy a Tesla? No! Go with something practical that won’t set you back financially.
If you take this approach after being approved for, say, a quick business loan, you will be able to stretch this money much farther than you have expected.
Destroying Your Credit Score
As you probably already know, having a bad credit score can act as a scarlet letter that follows you around from town to town. It can be extremely hard to shake once you’re there.
Bad credit can come from mismanaging your money and paying your bills late. But did you know that having no credit at all can be almost just as bad?
In an article by Lauren Gensler in Forbes, Gensler found out that not establishing the right amount of credit can add some roadblocks that you may have never imagined.
“While it may seem counterintuitive,” she explains, “steering clear of credit and debt isn’t the responsible thing to do either. When it comes time to buy a house or a car, and you don’t have enough cash on hand to do so, the bank you approach for a loan will assess your risk. Do you have a squeaky clean past or skeletons in the closet? If you’re a credit hermit, you’ll have little to show either way.”
So make sure you keep on top of your credit even after you receive a loan from your lender. Just because you have jumped one financial hurdle, doesn’t mean you should build more of them further down the line.
Not Being Honest with Yourself
Everyone has their moments of weakness. You walk past a store and something is staring you in the eye from the window display begging you to whip out your MasterCard.
In these moments you should take a step back and think about what spending the money on this item will mean for you in the future.
Will you be able to buy your essentials for the week like groceries?
Will you be able to pay your rent and utilities for the month?
How long will it take to pay off the credit card bills?
If you need a loan, chances are you went through this process in order to finance a specific goal that will change your life for the better.
So why would you want to deprive yourself of this goal by buying something that is unrealistic?
You owe it to yourself, so be honest about your own financial status.
It’s a tough pill to swallow, but living comfortably within your means is the best thing you can do for yourself.
Falling back into your old bad habits
Once you get approval for a loan, having all of that money in your bank account can be a huge head trip. But once you start eyeing things you want to buy with all of this new cash, check yourself.
Don’t fall back into your old habits!
This money is not exactly yours, you will eventually have to pay it back to your lender. So don’t be reckless with it!
A great way to make sure you are not overspending is to keep a log of every purchase you make with this money. By doing so you will have a record of every financial decision you’ve made since the loan and it will hold you accountable.
We know it can be tempting to treat yourself, but now is the time to be responsible.
So if You Need a Loan – Remember The 5 Money Mistakes You Don’t Want to Make
When you need a loan, make sure that your tendencies to mismanage your money don’t get in the way of getting your life back on track.
With these helpful tips, you’ll be able to stay out of the red once you receive the check from your lender.
If you have any more questions on how to get a quick business loan, don’t hesitate to give us a call or send us an email. We are here to help!