Did you know there were 5.73 million more personal loans taken out in 2021 compared to 2019?
Soaring costs and inflation mean that more people than ever have needed the assistance that an online cash loan can offer. However, when taking out a loan you want to be sure to use the money you gain wisely.
Read on for tips on planning for and spending your loan money responsibly.
One of the first steps for planning how to spend your loan is to build a monthly budget. This will help you determine where your funds are coming from as well as where they are going so that you will be able to make your loan payment each month without issue each payday.
It will also help you to decide which, if any, current bills you may need to pay off with the instant loan you are applying for.
Once you have your budget in place, you can then create a list of how you would like to spend the personal loan money you have applied for. You can begin by taking a look through your budget to see where you spend your money.
This can help you determine if you may need to put a portion of the loan aside in savings, or exactly where you would like to spend your funds.
One of the most popular ways of budgeting is called the 50/30/20 budget rule. It states you can easily layout a budget like this:
Within each of these categories, how you spend your money is up to you. One way to do this would be to create a spreadsheet with one column of all your needs:
Then you would add a second column with any wants. These would include entertainment, eating out, travel, etc. And you could add a final column where you track savings.
Now that you have an overview of your where you spend your money, it is time to think about your financial future. Take some time to write out your short-term and long-term financial goals.
Short-term goals would be things like paying off a credit card, taking a vacation, or putting away a certain amount in savings; things that can be accomplished within one to three years.
Long-term goals are generally thought of as something reached in the ten-year or more range. These might be things like how much you’d like to save for retirement or saving for a child’s education.
Once you have all these pieces in place, a budget, your spending priorities for your loan, and your short and long-term financial goals, it’s time to create a plan for how you will spend the money from your loan once you have it.
You can use your budget to help you determine what you are spending each month. This will help you decide if you need to set money aside from your loan to supplement your monthly income.
Your other spending priorities, combined with your financial goals, can help you make wise decisions about where to put the rest of your no credit loan money.
Some wise loan spending options might be:
As you go about spending your loan money, it will be important to track your spending so that you do not overspend in any area or run yourself out of funds before your project is complete.
If you are using your loan for something like a home repair it might be helpful to consider putting together a budget for the project. This can help you keep costs to a minimum and will also make tracking much simpler.
If you are using your loan to pay off credit cards or other debt, you may want to lay out all the figures on a spreadsheet and determine what can be paid off, what can be paid down, and what debt will be remaining.
Once this is complete, you can make a plan for how to pay down the remaining debt. You can create a new budget with your new payment amounts minus the paid-off debt.
Once you have a budget set up both for yourself and for any projects you are undertaking, you will want to review them regularly. This will help you to track progress and make any adjustments necessary.
As time progresses you will get raises at work, you will pay off bills, and other things will change that will alter your budget.
Make a habit of checking your budget regularly to ensure that you are on track to meet the goals you have set, both short-term and long-term. Now that you have a plan in place, you can make simple adjustments if goals or priorities change.
You’ve done the hard work of applying for your online cash loan and now you know how to create a plan to use the money wisely. Even if you have no credit history, you can build yourself a budget and meet your financial goals.
Take the time to think through what the best use for your personal loan would be. Are you paying off debt? Needing to do some home repairs? No matter the situation, make a plan and use your money wisely using the steps above. Click here to connect with a lender today.