Real Accounts: Seyma Talks Setting Goals & Borrowing Money from Family
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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 Seyma, who borrowed money to buy her first car. While the money was loaned to her by family, there was a certain amount of risk involved. She didn’t want to let them down.
The first time I borrowed money was from my parents for a car. I was lucky enough to have their support, and I felt safer asking my family for money than I did going to a bank, which was foreign to me at the time.
The loan was a supplement to money I already had. I’d saved up for the car, but I needed a small amount to top up the funds. My parents were kind enough to help me out, but I still had to be very organised and strict with myself. I wanted to make regular payments back to them. It wasn’t fair for them to be out of pocket.
When I finally had enough money, I went out and bought the car. Excited was an understatement. I couldn’t wait to hit the road! I think that was the first time I really understood the true meaning of financial freedom.
I had no knowledge about financial institutions at the time. So, I’m glad I opted to borrow from my parents. I was definitely hesitant to reach out to a bank as I was young and didn’t really understand the financial world.
Saving for the car was a long-term goal. I knew that as soon as I got my licence, I would buy a new car. But, as a first year uni student it was quite a big purchase for me. I’d never bought anything that significant before. I suppose there was a bit of risk involved.
Paying it back took time. A couple of years to be precise. I had to be very strict with money and save up enough to make regular repayments. To make matters worse, there were loads of additional costs that came with the car — servicing, rego, etc. — which I hadn’t planned for.
I learned plenty along the way. Although I didn’t get into any financial strife, I was reminded that there’s only so much you can plan for. There will be unexpected costs — so be prepared to juggle them.
Here are five things I learned:
- Having a goal to work towards is great motivation to save money
- Don’t borrow more than you can pay back
- It’s important to have a balance. It pays to be strict, but make sure you treat yourself too
- Every financial journey only leads to great points to learn from in the future
- I’m much more confident now that I’m older to get a bigger loan for my next goal, such as a house. I know how to organise myself accordingly to pay it off.
So, do I regret borrowing money to buy the car? Of course not. I still I use it every day, and I don’t plan on getting rid of it anytime soon!