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Is it Better to Borrow or Wait and Save?

If we want an item that we cannot afford then we will basically have two options. We will be able to borrow the money or we can wait and save up for it. There are advantages and disadvantages of both and it is a good idea to think through them all so that you can decide which option will be the best one for you.

Advantages of borrowing

If you borrow the money that you need to buy the item then you will have it right away. There will be no delay and you will be able to shop immediately. Usually it does not take very long to organise a short term loan and therefore this whole process should be done very quickly.

Disadvantages of borrowing

When you borrow money there is a charge. You will usually have to pay interest and there may be charges as well. You will have to repay these on top of the amount of money that you have borrowed. You will also often have to make regular repayments. These can be inconvenient if you are having to make lots of other payments as well and so you need to be really careful to find out how much they will be and whether you will be able to afford them. You will also only be able to borrow significant sums of money if you have a good credit record. This could mean that there will be some people that will not even have the option of borrowing.

Advantages of waiting and saving

If you wait to buy something and save up you will avoid the costs of a loan. You will also not need to worry about repaying. Of course, you will need to be paying regular amounts into your savings account rather than paying loan repayments. However, you can much more flexible and change the amount that you save depending on how much money you have available to you. This means that if you have an extra expensive month you can save less but if you have a cheap month then you can save more. If you wait before you buy something it will also give you more time to think about whether you really want the item. It might be the case that you will be able to find something better while you are waiting.

Disadvantages of waiting and saving

If you save then you will have to wait to buy the item, so you will not be able to get it right away. It might go up in cost by the time that you have the money. It might even stop being sold and so you will have to look for something else instead. You could really regret waiting, but if you check out the stock levels then you will be able to make a prediction about how long it will be until the item is likely to sell out.

So, as you can see, there are lots of arguments in different directions as to which option might be the best. It is therefore a good idea to have a think about it from your perspective. Consider what is important to you. For example, think about whether you want the item really quickly and are prepared to pay extra for it or whether you would rather save money by waiting and saving up but risk that it is no longer available once you get the money. You may find that it will depend on the item and you might sometimes want to buy some items really quickly but with some other items you want to take the time to save up and think about whether it is something that you really want.

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