Knowing how to manage your money is essential, and being aware of smart strategies to help you boost your financial IQ can put you in a better position for the future. Borrowing can be used wisely and in a strategic way to help you meet your financial goals, enhancing your overall financial intelligence. Whether you’re looking for a payday loan lender to help you deal with an emergency expense, or student loans to help you improve your skills and set you up for a better future – we’ll take a closer look at a few smart strategies to help you below.
Educational investments
When it comes to borrowing money to boost your financial IQ, investing in your education is one of the most beneficial. Whether you’re studying a degree, a certification, or a specialised course, investing in yourself, and your knowledge, and learning new skills can lead to earning more money in the future. Whilst these courses can be expensive, borrowing money means you can access education to enhance your quality of life, and allow you to work towards financial stability in the future.
It’s important to borrow for education carefully and ensure you research the expected ROI when it comes to your chosen field of study. You should also be aware of your repayment plan to ensure you can manage costs and reduce the risk of falling into debt.
Small business ventures
Starting your own business can boost your financial IQ, but it can be difficult to get your ideas off the ground without external help. This is where start-up, personal, and small business loans can help provide the necessary funds to launch your venture. There are a few ways in which borrowing money can help your business, including allowing you to access the equipment and software you need to run your business successfully. It can also help you acquire premises, employ and train new staff, and purchase inventory.
Building credit and financial responsibility
Borrowing to boost your financial IQ plays an integral part in building and improving your credit score. Your credit score – presented in the form of a three-digit number – shows lenders how creditworthy you are when it comes to borrowing and paying back the money you borrow. It can play a role in the interest rates you are offered, and whether you’re approved for a loan of your choice.
By applying for manageable loans, you can establish a positive credit score and history. This could be particularly helpful for those with low credit, or no credit score at all. Be aware that before you apply for loans to improve your score, you’ll need to make sure you can afford the loan to avoid having a further negative impact on your score.
Emergency funds
Everyone should have an emergency fund to help them deal with unexpected expenses. However, saving can be difficult and might not always be possible if you’re on a low income. This is where borrowing can help. Short-term and payday loans can help you deal with an emergency when your income will not stretch to cover it, without derailing your wider financial plans. These loans should be used sensibly and only when needed to avoid high-interest charges.
