MSE Poll:What is it appropriate to borrow for?

Senseicads

Its all entirely subjective. Lots of people saying they wouldn't borrow for a kitchen. We just got our kitchen on interest free credit and have stuck the cash we had for it into premium bonds. We just withdraw a sum every couple of months to pay the next few months payments. At any point we can decide to pay it off but why would we? We've already had a few tidy wins!

GreenQueen

I've always believed in the principle of not borrowing if the repayment will outlast the thing you are borrowing for, e.g. mortgage is fine, because you'll still have the house after 25 years, a holiday is not because you will be paying it back long after the holiday is a memory. If it is something essential that can't wait, e.g. dental treatment, you may have to borrow, but I wouldn't be happy doing so.

Borrowing is, of course, dependent on your ability to make the repayments - not how much the borrower says you can borrow, but how much you can realistically pay back.

happyinflorida

StyxianCetacean wrote: »

What is it with MSE voters and hating Christmas?

It's not a case of hating Christmas it's a case of being sensible and not going into debt, only spend within your means, save up for it, do the shopping for it in the sales - go to the £ shop instead of expensive shops as you'd be amazed at some of the excellent bargains they have in there - I got an M&S vase, price tag still on bottom, originally £25 in £ shop for £1 - I was so pleased with it, got one for myself and my mum! She loved it.

happyinflorida

I'm surprised at how many people would borrow to set up a business.

New businesses normally don't make any money, sometimes for up to a year, so if you haven't got the savings to set up the business and support yourself for a year, how are you going to repay the loan as well?!

I did debt counselling previously and had many a person who'd set up a new business with borrowing and then going further and further into debt because of not making any or enough money to cover outgoings.

It's madness - please be aware of this before thinking you're going to make a fortune, at first you won't.

I would say, if after a year - maximum, you're still not making money, close the business - it's not worth it.

Murphybear

NaughtiusMaximus wrote: »

Slightly bemused that some people seem to think a house should be a cash only purchase.

Obviously we've got a few rich people on MSE :rotfl:

Murphybear

In an ideal world the answer to all these would be no with the exception of a house. If you live in London you could spend half a million on a modest property and very few people have that sort of money in the bank. Apart from the people who voted "no" to that question

Unfortunately we don't live in an ideal world and borrowing money has become a way of life

phillw

I find the question odd because all my spending is on credit cards, whether I pay it off after the 50 days or not is still borrowing.

Even if I pay cash then I'm borrowing it from my savings as I'll fill that up again but in the meantime it's cost me interest.

The question you should ask is whether spending the money will really make a difference to you or are you using it as a drug.

NaughtiusMaximus

phillw wrote: »

I find the question odd because all my spending is on credit cards, whether I pay it off after the 50 days or not is still borrowing.

Technically it is borrowing but I wouldn't count it as such if you always pay the balance off in full each month and therefore don't pay any interest. I do exactly the same in order to earn cashback so there's a small financial gain from using credit cards for everything.

Interest free credit I do count as borrowing because in most case if you shop around you can buy the same product for less. In these cases you may not be paying interest but you are still paying a premium to spread out the payments.

PasturesNew

Like everything in life, you can't have a black/white yes/no answer because every question has to be asked in context. Things are never "the one thing", but several things.

e.g. Is it OK to borrow for a car? No.
But it is if your job relies on it, you need one in the next 2 days, the dealer's just next door and there's an ideal car you can buy today that gets you to work tomorrow so you don't lose your job. So a no suddenly becomes a yes because, in context, nobody was sitting idly pawing through adverts wondering whether to buy a car, or which.... if your back's against the wall .... the answer might have to be a "yes".

PasturesNew

NaughtiusMaximus wrote: »

Technically it is borrowing but I wouldn't count it as such if you always pay the balance off in full each month and therefore don't pay any interest.

But that's "gambling" on having your job tomorrow.

If you lose your job tomorrow then suddenly it's "borrowing" as your next wages are spoken for to pay for far more important things than paying off a credit card.

Some people sail through, expecting life to be the same tomorrow and next week as it was today and last week....

It's borrowing unless you immediately have the funds to pay it in full already and just "chose" not to.