Page 36 - Book2E

People are living longer than ever before, a phenomenon undoubtedly made necessary by the 30-year mortgage.
—Doug Larson
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Is Borrowing Easier?
When you are faced with an emergency, it may seem easier to borrow the money to take care of the problem rather than having to save the money for yourself. Borrowing doesn’t require an immediate sacrifice, and you can get the money right away and then pay it back later after the emergency is taken care of. But is it really easier?
Borrowing is expensive . Not only do you have to pay back the money you borrow, you have to pay the interest charged for borrowing it.
Borrowing is risky . It may seem easy the first time you borrow for an emergency. But when the next problem comes along, it may not be so easy to borrow to cover it, especially if you are still paying off the first loan. A few unexpected emergencies can put you in a dangerous financial situation. Talk to your FFEF debt management counselor about ways to reduce your current expenditures so you can begin to put a little away to cover the unexpected. Emergencies happen
to all us.
Borrowing can be depressing . Banks
don’t want to lend money to someone they are not sure will be able to repay the loan. Just because you need the money doesn’t mean you will be able to get a loan. If you have saved the money, you will be spared the poor self-image that can result from
having a loan application rejected.
Borrowing causes stress . If you are able to obtain a loan, then you are faced with finding the extra income every month to make the loan payments. If you didn’t have enough to save the money in the first place, how will you have enough to pay the loan? If you are unable to make the payments on time, you run the risk of having your credit standing lowered.
Saving Makes Good Cents