MSE Poll:What is it appropriate to borrow for?

Former_MSE_Karl · 15 January 2019 at 4:18PM

Poll started 15 January 2019

When is it right or wrong to borrow? Are some things more acceptable than others – where is the line between flippant purchases and core needs – 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 – in effect a loan.

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

Click here to vote in the poll

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!

[purplesignup][/purplesignup]

NaughtiusMaximus · 15 January 2019 at 5:40PM

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

StyxianCetacean · 15 January 2019 at 6:56PM

What is it with MSE voters and hating Christmas?

leetabix · 16 January 2019 at 4:23AM

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 · 16 January 2019 at 5:10AM

StyxianCetacean wrote: »

What is it with MSE voters and hating Christmas?

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 · 16 January 2019 at 8:29AM

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 · 16 January 2019 at 9:35AM

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 · 16 January 2019 at 10:39AM

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 · 16 January 2019 at 11:19AM

Pmarmalade wrote: »

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.

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

sneddyb · 16 January 2019 at 11:24AM

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 · 16 January 2019 at 3:05PM

I would borrow money for a non-essential item simply because I like it, this isn’t ‘living beyond your means’, it’s depends how you borrow the money, if I used a 0% card and paid it back when I’m next paid or over a couple of months I don’t 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 I’d 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.

MSE Poll:What is it appropriate to borrow for?

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