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  • FIRST POST
    • MSE Karl
    • By MSE Karl 15th Jan 19, 2:18 PM
    • 124Posts
    • 40Thanks
    MSE Karl
    MSE Poll:What is it appropriate to borrow for?
    • #1
    • 15th Jan 19, 2:18 PM
    MSE Poll:What is it appropriate to borrow for? 15th Jan 19 at 2:18 PM
    Poll started 15 January 2019
    When is it right or wrong to borrow? Are some things more acceptable than others Ė where is the line between flippant purchases and core needs Ė or is it more about long-term investment?

    We've listed 20 options and want to know which you feel is appropriate to borrow for, or if it's appropriate to borrow at all. We've included some disguised lending such as paying for your mobile phone or car insurance monthly Ė in effect a loan.

    Please select YES or NO for each option under the relevant category.

    Did you vote? Are you surprised at the results so far? Have your say below. To see the results from last time, click here.

    If you haven't already, join the forum to reply.

    Thanks!


    This Forum tip was included in MoneySavingExpert.com's weekly email!
Page 1
    • NaughtiusMaximus
    • By NaughtiusMaximus 15th Jan 19, 3:40 PM
    • 1,772 Posts
    • 4,390 Thanks
    NaughtiusMaximus
    • #2
    • 15th Jan 19, 3:40 PM
    • #2
    • 15th Jan 19, 3:40 PM
    Slightly bemused that some people seem to think a house should be a cash only purchase.
    • StyxianCetacean
    • By StyxianCetacean 15th Jan 19, 4:56 PM
    • 8 Posts
    • 8 Thanks
    StyxianCetacean
    • #3
    • 15th Jan 19, 4:56 PM
    • #3
    • 15th Jan 19, 4:56 PM
    What is it with MSE voters and hating Christmas?
    • leetabix
    • By leetabix 16th Jan 19, 2:23 AM
    • 36 Posts
    • 10 Thanks
    leetabix
    • #4
    • 16th Jan 19, 2:23 AM
    • #4
    • 16th Jan 19, 2:23 AM
    I can understand why borrowing is acceptable for emergency/unforeseen situations (i.e. broken fridge) in addition to a mortgage (even though I think they're overpriced and people should look to save as long as possible to minimise the amount borrowed, depending on the amount of rent they're currently paying).

    However I really don't understand why people think that borrowing is acceptable for non-essential items when they should instead to learn to live within their means.
    • Feral Moon
    • By Feral Moon 16th Jan 19, 3:10 AM
    • 2,877 Posts
    • 4,519 Thanks
    Feral Moon
    • #5
    • 16th Jan 19, 3:10 AM
    • #5
    • 16th Jan 19, 3:10 AM
    What is it with MSE voters and hating Christmas?
    Originally posted by StyxianCetacean
    Who hates Christmas? Just because people choose not to borrow money to pay for it doesn't mean they hate it. It's the sensible option and should be saved up for all year round.
    • pjcox2005
    • By pjcox2005 16th Jan 19, 6:29 AM
    • 618 Posts
    • 688 Thanks
    pjcox2005
    • #6
    • 16th Jan 19, 6:29 AM
    • #6
    • 16th Jan 19, 6:29 AM
    It’s a bit random as it depends how you look at it. Football season ticket you’d probably say no, but if they’re going to attend every match anyway as they have the money on a weekly basis, then you’d say yes borrow the money (where you can get low to zero interest) so you get the season ticket discount and make it cheaper overall.

    You can basically make an argument for and against all of those depending on the circumstances and how easy you assume it is to pay off the debt. Responsible borrowing with a plan is fine.
    • bishbut
    • By bishbut 16th Jan 19, 7:35 AM
    • 8 Posts
    • 4 Thanks
    bishbut
    • #7
    • 16th Jan 19, 7:35 AM
    • #7
    • 16th Jan 19, 7:35 AM
    The only things you should borrow money for are things you actually need or want that would take a long time to save up for eg.house or new car anything else you can save money for or do without until you have the money saved .I don't spend if I don't have the money to pay for the things I need or want .My credit card is paid by direct debit every month I have very little income (a pensioner) but I only owe money on my car but know that I have enough to pay every month if I didn't I would not have bought it
    • Pmarmalade
    • By Pmarmalade 16th Jan 19, 8:39 AM
    • 163 Posts
    • 137 Thanks
    Pmarmalade
    • #8
    • 16th Jan 19, 8:39 AM
    • #8
    • 16th Jan 19, 8:39 AM
    A few weren't as clear cut as a simple yes/no.

    Car - I'd never buy a new car and prefer to pick up something with a good reliability record 2-4 years old, when someone else has paid the worst of the depreciation. Then I'd take out a personal loan at a good rate only if I didn't have enough savings and my old car was no longer reliable or cost-effective to keep up.

    Fridge/freezer - Ideally your emergency fund should cover that, but if you don't have one then you can't really live without it, so a 0% credit card would be the next best thing.
    • PipneyJane
    • By PipneyJane 16th Jan 19, 9:19 AM
    • 1,051 Posts
    • 8,054 Thanks
    PipneyJane
    • #9
    • 16th Jan 19, 9:19 AM
    • #9
    • 16th Jan 19, 9:19 AM
    A few weren't as clear cut as a simple yes/no.

    Car - I'd never buy a new car and prefer to pick up something with a good reliability record 2-4 years old, when someone else has paid the worst of the depreciation. Then I'd take out a personal loan at a good rate only if I didn't have enough savings and my old car was no longer reliable or cost-effective to keep up.

    Fridge/freezer - Ideally your emergency fund should cover that, but if you don't have one then you can't really live without it, so a 0% credit card would be the next best thing.
    Originally posted by Pmarmalade
    I agree. Some of the options aren't so clear cut. I wouldn't borrow to replace a kitchen - for 3 years, I lived with one that was little more than a shell - but if I didn't have the cash, I would borrow on a credit card to replace a broken fridge/freezer or a broken stove or a broken washing machine. Paying credit card interest on a washing machine is cheaper than using our local laundromat, which worked out at over £10 a wash-and-dry per load when I last visited in 2012.

    - Pip
    Last edited by PipneyJane; 16-01-2019 at 9:22 AM.
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    • sneddyb
    • By sneddyb 16th Jan 19, 9:24 AM
    • 1 Posts
    • 0 Thanks
    sneddyb
    It depends.......
    Many questions depend so much on who - and where - you are! If,for example, you live miles from a bus stop, then a car is essential, but if public transport is reasonable you should save up if you really want to spend money on a car. You may also, of course need one if,like me, you are getting too old to carry the shopping; (but my car is now 26 years old and should outlive me!)
    • Milliel
    • By Milliel 16th Jan 19, 1:05 PM
    • 1 Posts
    • 0 Thanks
    Milliel
    I would borrow money for a non-essential item simply because I like it, this isnít Ďliving beyond your meansí, itís depends how you borrow the money, if I used a 0% card and paid it back when Iím next paid or over a couple of months I donít see the problem, it actually helps your credit rating to have debt and to repay it on time - sensible amounts of course. But if I was to save up and buy it then It would just mean Iíd have to wait longer for it when I could have it sooner and benefit from it more, I would never pay interest on borrowing money.
    • Senseicads
    • By Senseicads 16th Jan 19, 1:47 PM
    • 138 Posts
    • 95 Thanks
    Senseicads
    0% finance
    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
    • By GreenQueen 18th Jan 19, 9:22 AM
    • 363 Posts
    • 1,652 Thanks
    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.
    A Clutter Free Life - 2019 in 2019 - 202/2019
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    ...I figure it's taken a long time to accumulate all this carp so it'll take a while to get rid of it too.
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    • happyinflorida
    • By happyinflorida 19th Jan 19, 2:49 PM
    • 761 Posts
    • 644 Thanks
    happyinflorida
    What is it with MSE voters and hating Christmas?
    Originally posted by StyxianCetacean





    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
    • By happyinflorida 19th Jan 19, 2:54 PM
    • 761 Posts
    • 644 Thanks
    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
    • By Murphybear 20th Jan 19, 3:54 AM
    • 4,496 Posts
    • 8,625 Thanks
    Murphybear
    Slightly bemused that some people seem to think a house should be a cash only purchase.
    Originally posted by NaughtiusMaximus
    Obviously we've got a few rich people on MSE
    • Murphybear
    • By Murphybear 20th Jan 19, 3:59 AM
    • 4,496 Posts
    • 8,625 Thanks
    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
    • By phillw 23rd Jan 19, 11:48 AM
    • 2,159 Posts
    • 1,675 Thanks
    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
    • By NaughtiusMaximus 24th Jan 19, 3:50 PM
    • 1,772 Posts
    • 4,390 Thanks
    NaughtiusMaximus
    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.
    Originally posted by phillw
    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
    • By PasturesNew 24th Jan 19, 3:54 PM
    • 66,137 Posts
    • 388,453 Thanks
    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".
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