Borrowing money can be something feared by some people. It is not surprising that it can cause stress for those that has seen other struggle and suffer as a result of debt. However, it is really important to understand that borrowing money can be really helpful and can help us to improve our lives as long as we do it sensibly. However, whether it does benefit us will depend on many factors.
Good and bad debt
There are many different types of debt and some people find it easier to split it into good and bad debt. The definitions can vary a bit between the two depending on who you ask but there are some general principles which are the same. It is easier to explain what good debt is and then assume that anything else is bad! If borrowing money means that you can be better off in the future then it is considered to be good debt. This would be things like a student loan, which improves your employment prospects and a mortgage which means that you can own your own home. There are also other things that might fall into this category, perhaps buying a car so you can drive to a better paid job or to pay for some restoration on your home to stop it falling down. Examples do not have to be as extreme as this and they can vary massively as we all have different things which are important to us and that will make a significant difference in our lives.
Choosing good debt is not just about what you are planning on spending the money on though. It is also about choosing the right loan for your needs at the right price and not just looking for a way to get cash now without any real thought. This means that you will have to do research to find out what loans are available and which types will suit your needs with regards to the amount you can borrow and how long you will have to repay them.
It is really important to make sure that you can manage the repayments on your loan. You need to find out how much you will be expected to repay and how often. This will allow you to look at your bank statements and see whether you would normally have enough money available to cover this cost. It is really important to do this as you want to be sure that you do not struggle to repay the loan. If you think that there is a risk that you will struggle then you need to look carefully at what you are spending and see whether you would be able to cut back in order to be able to afford them. If not you would be best to avoid having the loan.
It is also good to imagine how you might cope should the repayments get more expensive. Unless you are on a fixed rate you may find that the cost will increase if interest rates go up. This may not happen but It is good to be prepared just in case. It is worth just working out whether you would manage if you had to pay more and how much more you could afford. Always have a plan in place in case payments get higher than you expect, perhaps you can work more hours or cut down spending in other areas, for example.
Keeping stress to a minimum
Some people do find that borrowing money makes them stressed. Perhaps they are worried about being able to make the repayments or just the idea of being in debt. However, if you have very careful considered whether you should take the loan, chosen the right loan and made sure that you can afford the repayments then there is no reason why you should feel stressed about it. Obviously, it is not always that easy to apply logic to stress, but hopefully if you can see that you have done the right thing and can concentrate on the benefits that you will see from it in the future, then you should be able to feel less stressed. If you feel that just the burden of debt will make you feel stressed, then consider saving up instead or finding a way to keep the debt out of your mind.
So, in answer to whether it is ever safe to borrow money; the answer is most certainly yes. It is just important to think through your decision carefully as you want to make sure that you really do need to borrow the money and that you will benefit from it. You also need to be sure that you will be able to afford the repayments, even if they go up in price. By sticking with this you can use borrowing very much to your advantage and improve your future by investing financially in it.