THE BEST PLACE TO BORROW MONEY

Learn where the best place to borrow money is. Hint: it’s not where you’re probably borrowing it from.

The best place to borrow money interest free

Every once in a while, most of us find ourselves in need of a little more money than we have in spending cash. No matter how well we stay on top of our budget, it happens to the best of us. But where is the best place to get that money from?

A bank is a place that will lend you money if you can prove that you don’t need it
– Bob Hope

PLACES YOU COULD BORROW MONEY FROM

So you need a little extra cash. Perhaps you have an unexpected expense, or an immediate need for a large purchase. Whatever the reason is, it is important to make sure you’re smart about where you borrow it from.

Credit Cards

The first plan of action for most people is to use a credit card. I think credit cards are great for earning points and avoiding carrying tons of cash around. BUT only if you pay them off before accruing interest! That’s right – I think maintaining a balance on a credit card, even for one month, is a bad idea.

Those Checks The Bank Sends

Do you receive checks from your bank made out to you, and all you have to do is deposit them to get the money? Yeah – they make it all too easy, don’t they? I normally get a few of these around Christmas time. But keep in mind, no matter how tempting these are, they are basically the same as a credit card. In fact, many of them are linked directly to your credit card, and that is where the balance will go. But either way, it isn’t free money, and although it can get you by in a pinch, I don’t think it’s the BEST idea.

Borrow Money From Friends/Family

There are so many jokes and quotes out there about borrowing money from friends and family. In all honesty, in my early years of marriage I borrowed money from my parents on multiple occasions, and luckily it never became a hostile situation. This is because we discussed exactly when and how I would repay the money, and then I stuck to it. Another important factor is that my parents didn’t NEED the money in order to pay their own bills. It was money they had in their savings account that they weren’t planning to spend. That is a key factor to a successful loan. I do think really close friends or family can be an okay place to borrow money from, but I think there is a better option. This brings me to my next point.

The best place to borrow money, in my opinion, is from yourself! Wait, what? Yes. Let me explain.

I’ve been there. I’ve needed a little extra cash. Maybe my water and power bill was higher than I expected because we ran the a/c too much. Or perhaps that car seat I know I’m about to need finally went on sale and it will save me money long term to purchase it NOW, but I don’t have the cash. Or heck – maybe I decided to go off the rails and go for an unplanned weekend away. This is life, and these things happen.

For me, the easiest thing to do would be to charge the whole shebang on a credit card, and then cross my fingers that I can pay it off when the bill comes. But of course, if I had the money to pay it off when the bill comes, I wouldn’t have been charging it in the first place! I should know better than that, and I finally learned.

All too often we will pay interest on our credit card because we just need a little extra. I’m talking about things that we can pay off in 1-6 months. But interest is interest. I hate paying fees. They make me angry, and hurt my soul. I will pay good money for quality goods or experiences. However, fees are just BS ways to steal money. Processing fees, interest fees, convenience fees, credit card fees, bank fees – they are everywhere, and to me they are the same as throwing a few dollars out the window on the freeway every few miles.

HOW TO AVOID PAYING INTEREST WHEN YOU BORROW MONEY

All the while we’re throwing our money away on interest, most of us have a savings account. It’s our next egg, or our money to pay an annual bill, or something we’re saving for. We don’t want to touch that money, because we’re smart enough to know that it is very difficult to save money up, and if we start giving ourselves permission to spend it on items it isn’t intended for, we’ll get into trouble. You’re absolutely right. The best way to keep money in your savings account is to pretend it isn’t there.

BUT what if we treated our savings account like a credit card? Here’s what I do. If I need a few hundred extra dollars, I borrow it from my savings account. When I borrow it, I work out a realistic plan to pay it back. Then I stick to it! I treat it like a normal bill. I suppose it takes a little self discipline, but really I think it is more about thinking of it in the correct way. If you think of it like a bill, you will respect the need to reimburse yourself and you’ll actually pay it back.

I know paying $50 here and there on interest may seem like the price of doing business, but I double dog dare you to add up how much money you’ve piddled away on interest in the past 5 years. You’ll probably be shocked.

WHAT IF YOU DON’T HAVE ANY MONEY SAVED TO BORROW FROM?

Well, my dear, let me help you out with that. You can learn all of the basics to make a successful budget from scratch HERE. If you have an irregular income, you’ll want to check THIS out after you’ve read the budget guide. Then, THIS will show you how to stay out of debt forever. I’ve got you covered.

HOW TO MAKE A BUDGET
HOW TO BUDGET ON AN IRREGULAR INCOME
WEEKLY SAVINGS PLAN TO STAY OUT OF DEBT FOREVER
HOW TO MAKE A MONEY JAR