The increasing urge for people to purchase things they don’t really need have brought about the rise of over expenditure even for those average income earners. This has resulted with more and more people being debt burdened. The main reason for this is that individuals especially wage earners care very little when it comes to managing their finances not knowing that being able to properly control and manage their systems of BORROWING against what they earn can be financially advantageous for them.
Relationship between Borrowing and Personal Finance Management
Main sources of an individual’s additional financial resources (aside from wages and other incomes) are credit cards and other types of loan. Credit card is the simplest, easiest and most popular way of getting additional cash. But remember that each item bought through credit card will always be billed. So individuals should make it a habit of only using credit card as a last resort solution for additional expenditures. Always keep in mind that the use of credit card will only result to debt accumulation and as such will only worsen your debt problem. If it is really necessary for you to get a credit card, make sure you opt for a credit card provider that charges the lowest interest. Always remember that your interest expense must always remain low in order to balance your other expenses that need to be paid.
Debit Card, Personal Loans & Savings
Another way to manage your finances is to use debit cards. The use of debit card will restrict you to only use as much as what is stored in the debit card account. Debit cards will keep you away from overspending and the unnecessary accumulation of debt. Personal loan in Singapore is also another source of an individual’s finances. However, since this is borrowed money from an institution, make sure that the one you’re getting has the least interest and finance fees attached. Finally the best and most effective way to manage your finances is to save money. No matter how much you make, there will always be room to save. It is just a matter of balancing your income against your expenses and even a child can do that.