Real Accounts: How a Regimented Plan Helped Amin Pay Off His Loan
Occupation: Account Manager
When it comes to saving, spending and lending, everyone’s got a story to tell. In our new series Real Accounts, we talk to different millennials about their (very) personal finance experiences and some of the key lessons they’ve learned along the way.
This week we chat to account manager Amin, who decided a small personal loan was the best way to supplement his income when he was breaking into the fitness industry. Did it pay off?
I decided to get a personal loan, as I wasn’t in the best position financially. I was working as a personal trainer, and I had a bit of a slow start in the industry. I had rent to pay (for my apartment and space at the gym), and groceries, petrol and gym equipment to buy. Basically, the bills were piling up, and I didn’t have the funds at my disposal to pay them.
I knew I was stuffed when I realised I had $1.00 in my account. I was working hard, but struggling to make ends meet. I needed some kind of help, and I needed it fast.
Pride got in the way of me asking my parents for money. I didn’t want them to think I couldn’t support myself. I felt asking them for money was a sign of weakness. I needed to show them I could self-support and my choice to be a personal trainer was a good one.
I didn’t even consult anyone when I applied for the loan... I just went straight to the bank and did it.
I was so relieved when the money landed in my account. Rent is non-negotiable, after all. The extra money meant I could pay for my rent, bills, fuel and groceries comfortably. The panic ceased.
I took a sensible but regimented approach to paying off my loan. I had a strict budget to follow and the heavy weight on my shoulders of knowing I was in debt, and I needed to stay focused to get out of it. I managed to control myself with the money, and only spend it on necessities.
I spent what I needed and always made sure I had enough revenue coming in to start paying it back. There were no “crazy” purchases, just ordinary life expenses.
A year and a half later, the loan was gone. While it took time and hard work to pay it back, I’m proud of myself for taking things seriously and not blowing out or going overboard.
Here are five things I learned:
- Don’t borrow more than you need
- Work out what you need the money for and give yourself a deadline or time frame to pay it back in
- Ask for advice first. Someone close to you has probably been in the same situation and might be worth speaking to
- Do your research: banks are not the only lenders and you might get better rates somewhere else
- Plan your budget BEFORE you borrow, so you know how to pay it all back and live whilst you’re doing so.