Sunday, 24 December 2017

Parental Parameters: When Borrowing Can Be Justified*


Living a life of responsibility isn’t for the faint of heart, especially not when you’re a parent. Now that you have kin of your own you’re living for them more than you are yourself. It's a blessing and also a necessary challenge to take care of children in the proper manner. Giving your children a good living standard doesn’t just happen. Although it may the time of year when cheer and hopes are extended, you can’t simply wish for a better life. It has to be earned and so much the better as when your children are growing up in better conditions than you did, you know you’re doing it right. Financial troubles are commonplace when it comes to families with newborns. You catch yourself thinking sometimes ‘how could someone so small need so much?’. You’re buying day clothes, clothes for bed, food, milk, outdoor winter clothes, dummies, bedtime wind chimes, medicines, vaccines and shots and even right down to the passport. No wonder things get tough and if they haven’t already they will soon. So when is it right for you to borrow money without jeopardizing your ability to maintain a good living standard for your child?


Shelter, first and foremost

The absolute basic necessity of life is to have a roof over your head. Before anything, finding solace in the fact that you can pay to maintain a safe and comfortable living space such as a home is paramount. When you’re lagging behind on heating and electricity bills, this will affect your baby directly. No matter how warm you wrap him or her up and the quality of material, you will need central heating. It's wise to keep the heating on just a little bit in the room where the cot is because baby bodies need support maintaining proper body temperature. Falling behind on rent or mortgage payments is incredibly stressful when you have a child to support. No more time are your justified to consider borrowing money, even if you have savings. Try to plan ahead by working out how much you’re paying monthly and how much is leaving your bank account when all expenses have been calculated together. This is so you can work out what is left over as that amount will act as a safety net when you do start to fall behind. If this is unsustainable, it's wise to begin considering borrowing money.

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Smartphone and company contracts

There are more people using mobile phone contracts than there are people who have bought the phone outright. This is obviously because the two main reasons are convenience and the ability to have the latest smartphone in your pocket. However, companies play the long game, and you will end up paying more than the retail price of the phone. Companies that offer contracts will offer plans that seem like low monthly payments but in actual fact take into account the retail sale price and the interest rates that are driven by demand. There are no two ways about it, and you will end up paying more for the phone if you’re on a contract. So ask yourself is it really wise to be on a contract when that money could be put to use somewhere else? It's a low payment for sure, but as the months go by your child will need more clothes, he or she will begin to eat more, and the health of the baby become more relevant as you take them outside the home more regularly.

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Can you manage a loan?

You’d be surprised at how many people know they can’t manage a loan but apply for one anyway. If you click here, you can see the regulations for payday loans which is one of the most popular categories for borrowing money. As of October 2017, there has been an announcement to change the rules that will come into effect in 2019. The most notable change is that payday loans of $500 will be allowed without restrictions. Also, the lender will now have to check whether the recipient can afford to make payments thus lessening the risk factor for both parties. With this, you may add another option to your repertoire as a short-term loan may get you through a rough patch without actually being too risky. This could come in handy if you’re going on holiday so as to introduce the new child to your in-laws who live abroad. The key is to find out as much as you can from government or organisation websites that clearly state the laws for loans. Then you can weigh up the benefits and the detriments before going ahead with anything, knowing your rights and what the loan companies can and cannot do to you.

When you lose everything

When you have lost a large part of your life, this is when it's absolutely justifiable to borrow money. The most common reason for a big change in a living standard will be some kind of natural disaster. If you have been flooded, and your house has been ruined along with almost all of your possessions, this is the right time to think about your financial options. Savings accounts are there for the long run and for old age, and so they should be the last resort for financial assistance. Also, you may be tied into a plan which forbids you from taking out money in the first place, until you have committed to the minimum amount of years. And this is the issue with many personal financial assistance routes, and it's money which is tied up and may take time to be released to you. Borrowing money might take a few days or just a few hours; it's the quickest way for a cash injection that’s for sure.


As a parent you first and foremost responsibility is to the child and finances play the most important part of security. There are some special circumstances where borrowing money makes absolute sense, but even still, the correct analysis of your situation should be taken in. Snip away any unneeded financial burdens and use that money to invest in your newborn children instead.
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