Tips on how to Reduce Your Borrowing

Many of us have borrowed money before. There are some of us that have borrowed and then paid it back, but others that still have debt and may even be borrowing even more money. Although borrowing can be helpful, such as when we use a loan to go to University or buy a home, there are types of borrowing which are really expensive and can just lead to us getting into debt without a great deal of benefit to us. This will depend on what you are spending the money on. It can be wise to look at ways to reduce our borrowing when we are perhaps not using the money for the most sensible of purchases. There are different ways that we can do this.

Try to reduce spending on luxury items

It is so easy to buy a lot more things than we need. It is not really our fault either as advertising leads us to believe that having lots of things will make us happier and so we can easily believe that. There can also be pressure from others to keep our homes looking a certain way, to dress a certain way and to own certain books, films, music and games, for example. Therefore, we can be spending a lot more money on things than we need to without really realising that we are spending unnecessarily.

It can be easier to cut down in this area than you think. Just asking yourself whether you really need something before you buy it can make you much more aware of what you are buying and make you think about why you are buying it. You may also find that if you compare prices between different retailer or slightly different items you may be able to buy things that you want without having to spend so much money.

Use your savings to pay off loans

If you already have loans then you may be trying to pay them off as soon as you can. This can seem like a daunting task but if you have some savings then you might be better off using them to pay off the debt. Often the interest on the debt is higher than any interest that you will receive on savings, although you will need to check this. You may feel worried about using savings to pay off a loan, but it can make a lot of sense. The loan will be paid off more quickly and this will save you money. You will no longer be paying interest on the loan and therefore will have that money available to put in your savings. You should soon be able to top up your savings account again and you will be free of that loan as well. If you worry that you will need money in the meantime and not have your savings to fall back on then you may need to be really careful with spending for a while. If you have an overdraft or credit card then you could use those in an emergency, but hopefully you would be able to be careful enough to manage without them.

Use spare money to overpay loans

If you have loans you will probably be paying back a bit each month. You may have a set repayment or just be repaying the interest, depending on the arrangement that you have with the lender. If you have spare money each month it can be wise to use it to overpay some of the loans. This means to pay back more than the minimum. Some lenders will be more flexible with this than others. It is worth finding out whether you can do this and if there is a fee associated with this. If you have a credit card, for example, you can usually decide how much you pay and can make additional payments at any time.

Even if you are making small repayments it can make a difference in the long run. Every repayment will reduce the interest charged and therefore make the loan cheaper and will end up meaning that it will be repaid more quickly.

Compare all prices when shopping

If you spend less money then you will have more money available to be able to pay back your loans. By comparing prices on the things that you buy you will be able to see what cheaper items are available and hopefully find some that offer good value for money that will save you some money. This can apply to everything that you buy, not just when you are in the shops but when you are buying insurance, utilities, fuel, transport and things like this as well. Then you will be able to use that money you save to help you to not get into further debt and hopefully to pay off some of the debt that you have accumulated.

Ways to Increase your Salary

Most people would like to have a bit more money and an increase in salary can be the best way to achieve this. Having a bit more could mean that you will be able to pay off your debts, put money in a savings account or just buy more things that you want. It can seem though that there are no solutions to getting more money, but actually you may find that you can try some things that you have not thought of before.

Ask for a Pay Rise

The first and most obvious way to try to increase your pay is to ask for a pay rise. This may or may not be appropriate depending on the job that you do. Some companies will do regular pay reviews and rises are not offered outside of those, but some may just award ad hoc pay rises. Whether you have been working for a company for a long time or just a short time, it is wise to find out how you go about getting a pay rise, so that you know the system. Then if you can ask for one, you can have a go at it.

Work More Hours

It may be possible for you to take on more work in order to get more pay. It could be worth asking whether there is any overtime or on call work that you might be able to do I order to earn more money. You may even just be able to extend the hours that you do in your current job in order to earn more. It is always worth asking as you never know what the company might do to be able to help. If the work you do is in high demand then you are more likely to be able to get more hours work.

Apply for a Promotion

Most promotions will come with more money. You will usually be expected to take on more responsibility and as a result of that will be paid more in return. It is worth looking around at the company that you work for to see whether you are able to find a job that would be a promotion. It could be worth asking around or looking at internally advertised jobs to see if there is anything that you like the look of that you could apply for.

Change Jobs

Many people find that changing jobs is the only way that they can get a rise. If there are no pay rises or opportunities for extra work then it could be the only way to get some extra money. It can be quite daunting moving to a new job, but you will have started your current job not knowing anyone and then settled in so you will be able to do the same with a new job. You might even find that the new job is more fun, with better people and gives you more opportunities as well as more money.

Take on Another Job

It may be possible for some people to be able to take on an additional job to the one that they are doing at the moment. There are part-time jobs out there which may be able to fit around the hours of a full-time job. Think about whether you want to do something similar to what you do in your main job or whether you want to do something very different which might make it more of a change and a break for you. Of course, the pay will be determined by the sort of thing that you choose to do so it is worth bearing this in mind.

Do Some Work from Home

Many people choose to do work from home, Although many conventional jobs cannot be done at home, there are still a lot of jobs that can be. There are plenty of jobs that you can find advertised online which will enable you to pick up some extra money. These ill tend to be casual work which means that they may not give you regular work and there will be no pension scheme, sick or holiday pay or anything like that but you could get some extra money to swell your salary. Online work can be low paid, but the fact that you can usually be at home and so still be with your family can make it worth it.

Start a Business

many people choose to start a business so that they can raise some extra money. This can be a lot of fun but also can end up being very stressful and taking up a lot of time. It can very much depend on what you choose to do. It is worth making sure that you prepare well and make sure that you will be able to fit it in and that you have all of the relevant skills before you start. Also think carefully about what type of business you start as some take a large financial investment and may keep costing money which could mean you are worse off; rather than better off.