Part 5. How Do You Achieve Financial Freedom Without Putting In Extensive Effort?
Before making financing decisions, check all the details to avoid future conflicts or implications.
Following all the previous steps of achieving financial freedom makes navigating through financing options and implementing them easy.
The 5th part covers fiancing instruments and various options you can choose depending on your requirements.
We have many financial needs to fulfil and maximize personal satisfaction. For us, it takes work to pay for an elevated purchase amount in one go. Sometimes, it makes sense to opt for financing your needs. We also have various financing options when making a large purchase. I'm talking about products for our day-to-day requirements. Be it appliances, add-on products for the home or office, or a few essentials requiring repair and replacements.
The financing relieves us from making large purchases as repayments can be made in equated monthly instalments over time. When buying a home or car for your needs, financing makes it easy and quick to fulfil them. Financing options depend on your requirements, and many options make it challenging to decide on. However, narrowing on needs can make it easy for us to select the best financing options from the lenders.
Financing and factors to consider
We all desire to live happily and enjoy what life offers us the most. Spending wisely and regularly saving money is the best way to secure your future. As needs expand and the desire to fulfil them intensifies, we seek ways to finance our wants. The economy stands on these two pillars: spending and earnings. We look for ways to increase our earnings and spend more to live a good life.
We all have specific basic requirements that need to be financed quickly.
If public transport facilities don't provide access to your area, you must buy a car to reach your workplace on time daily.
Even if you have access to public transport, sometimes you need your private vehicle primarily to cater to various needs.
Specific home improvement requirements include TVs, Refrigerators, furniture and fixtures, and home repair.
Other electronic gadget requirements include mobile and laptops.
Apart from small budget requirements, specific purchase needs include home buying, land, and business machinery.
All the large or small budget-specific requirements can be met swiftly through financing options. Financing makes it viable as the monthly outgoing of money justifies your buying. The small amount of EMI(Equated monthly instalments) can make the purchase affordable due to payments made in parts.
Banks and lenders also offer Buy Now Pay Later(BNPL) options through various modes to make consumer purchases easy.
Before you make any purchase decisions, consider your income and outgo each month first. I like short-term EMI options more than the extra extended term. I get tired of looking at the remaining EMIs.
I recommend shorter EMIs for small purchases; less than 20% of your income should be your monthly outgo. If you follow these tactics for EMI, you will be worry-free.
“The one who hugs a debt also shakes hand with a danger.”
― Amit Kalantri, Wealth of Words
Consider these steps before deciding on purchasing and buying on financing
Small amounts under $1000 or higher than $1000 purchases on EMI need careful consideration.
Check the few following details before buying any products on EMI.
Interest on loan and tenure.
Late and early payment charges, if any.
Percentage of upfront payment requirements.
Compare similar loan providers to get the best deals.
Ask your legal advisor or accountant if any doubt persists before making any final decision.
Keep at least one installment amount spare in advance in your bank account to avoid late payment charges.
I recommend checking all the paperwork before deciding on contractual obligations regarding taking a debt. You can ask your friend or family members if you need any clarification on paperwork.
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people who they don’t like.” - Will Rogers
Final thoughts
Keep all your past and present debt and financing data secure.
All the necessary financial data files must be kept secure so that they can be accessed in the future. You also need past and current financial data to prepare tax files and keep records.
This 5 part series on achieving financial freedom ends here, but The Financial will return next week with a new series on 'Financing Essentials'.
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