Avoid Borrowing by Being Creative

by Adam on March 3, 2014

Millions of people are currently in debt, with the majority of these people owing money to more than one lender. While there are certain times when taking out a loan may be appropriate, such as a home mortgage or to cover the cost of education, most of the time debt is not good. A loan will provide you with the cash you need upfront, but typically you will have to pay back much more than you borrowed.


This leads many people to live in a perpetual circle of debt that they feel they can never get out of. In some cases, people start borrowing more money to pay back the money they already borrowed.  The best way to avoid unmanageable debt is to not incur any debt in the first place.

For those in need of immediate financial assistance there are benefits and non-profit loan options, otherwise, below are some creative things you can do today to help you avoid borrowing money tomorrow.


Reduce Your Spending

One of the best things you can do to avoid borrowing money is to make more money available in your household budget. Look at where you are spending your money and try to find specific areas where you can cut back. Try some savings tricks like using coupons at the grocery store, purchasing items in bulk to save more money, or dine-in more often instead of eating out. You will be surprised how much you will be able to save during the year by just changing some of these basic spending habits.


Use the money that you saved and place it in a special savings account that should only be used in case of an emergency. Make sure this is a separate account at the bank and do not connect it to you main checking account. This will allow you to build up a nice savings account that you can use to make any necessary purchases and avoid borrowing money in the future.


Turn a Hobby into Cash

Naturally, the more money you have coming in each month, the more money you will have available to spend and/or save, and the less likely you are to have to borrow money. One great way to earn some extra money without having to get a second job is to turn a special hobby into cash. Nearly, any hobby can be turned into goods or services that people will pay money to receive.

For example, I love singing and have managed to get paid gigs at weddings and other church services.

Need another example? I have a friend who loves bikes and is good at bike maintenance. He’s now earning good money offering services on people’s bikes to get them ready for the spring weather that just around the corner!


Perhaps, you enjoy making things like jewellery or pottery, or you like painting pictures or can build furniture. Open up a store on Ebay and sell you items there. On the other hand, maybe you have a certain talent like playing an instrument, cooking or dog training. Advertise in your local paper to provide these services or lessons for people. It takes very little time and you get to continue doing the things you enjoy doing and make extra money at the same time. You can use this extra money to purchase things that you want or to pay off some of your bills and avoid borrowing money in the future.


Create a Savings Plan

The most common reason that people borrow money is to purchase something that they do not have the funds readily available to buy. To avoid borrowing money, you are going to have to come up with an alternative method to make the purchase. They best way is to save the money before making the purchase. First, create a goal and determine just how much money you can set aside each week towards this purchase. Now, set up a separate savings account to put the money in as you save it. By using a separate account, you will not be tempted to use it for other things. Post a picture of the item you want to purchase on your fridge, as a constant reminder as to why it is so important to you to save this money. This will encourage you to stick to your plan.


Make Payment Arrangements

One of the worst mistakes you can make is to borrow more money to cover the costs of paying back money you already borrowed. This will only put you further in debt. Instead, contact your current lenders and explain to them your current financial status and let them know how much you can afford to repay on a regular basis. Many lenders will be willing to work with you if you are honest and talk to them before your account is well overdue.


These ideas will help put more money into your pocket so you can purchase the things you want and you need without borrowing money. The most important thing to remember is that you must live within your means. You cannot spend more money then you have coming in, or you will have to borrow money. While it may not seem like it at first, living debt free will actually give you more money to spend in the long run because you will not be paying those high interest costs.


{ 1 comment… read it below or add one }

Thomas @ FinanceInspired

We should always reduce our spending to avoid borrowing. To prevent credit cash, you are going to have to come up with an substitute technique to buy. They best way is to preserve the cash before diving in.
Thanks to provide this nice content. I really experienced to study this article.

Previous post:

Next post: