Smart Borrowing Strategies for Achieving Your Dream

The modern economy only exists as it is thanks to finance and loans. Without loans, individuals wouldn’t be able to purchase long-term assets such as cars and homes. With finance available to buy almost anything one can think of, a borrower needs to be smart in order to achieve their financial goals. Everyone is different and has varying needs; so, what are the smartest strategies when borrowing to reach those goals?

The Evolving American Dream

The founding fathers wisely framed the America as the land of opportunity – one of life, liberty, and the pursuit of happiness. That pursuit has changed over the years as our needs as people have changed. Though the American dream was once believed to be homeownership though there many different dreams are out there; starting and owning a successful business; gaining a college degree; investing in stocks or property; or world travel. These goals are diverse and as such need different strategies in order to achieve.

Financial Planning for Your Dream

First off, you need to know what your dream looks like. If that’s saving up for a college education, you may need to set aside money in a high-interest bank account, investing in money markets or stocks, and budgeting so you can afford a loan of some sort to pay for your tuition. This can be applied to almost any financial goal including buying your first car, a home, or world travel.

Strategic Borrowing When Needed

Sometimes we need to go into debt to get started on achieving our financial dream. That means taking out a 30-year mortgage to pay for a home over time. These debts are good, as they aim to grow your wealth. Student loans, auto loans, business loans, and personal loans are all types of loans you should use when you’re looking to make a return on your investment. Different loan types can help achieve different goals. Bridging loans help you purchase a home while trying to find a buyer for an existing home – but make sure you only use it for that purpose.

A student loan is a good type of loan as you are investing in your future earnings as college-educated people on average make more than non-college-educated people. Remember to use a broker and compare alternative loan products to ensure you’re on the best rate and the most favourable terms.

When sudden expenses come up such as urgent travel, emergency medical, or appliance replacement bills, you may need to turn to payday loans. These should be used as a last resort and only if you cannot come up with the money in the necessary time.

Free Resources for Financial Guidance

There are many avenues to gain free financial guidance and advice, especially online. The Consumer Financial Protection Bureau offers guides for financial decisions so you make the right choices every time. Some financial institutions include free financial planning or advice services. The Financial Planning Association (FPA) offers pro bono financial planning to some underprivileged consumers. You can also take a free course called MoneySmart, offered by the Federal Deposit Insurance Corporation, which is also available in Spanish.

By following a few guides and getting the advice you need about finance, you too can achieve your own version of the American dream!