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Banking and Saving

Can borrowing be a sensible move?

The idea of borrowing seems like a bad idea and a scary move. It also sounds conflicting considering that you are trying to save and build wealth for the future.



Everybody wants to be able to build wealth for themselves and even leave a legacy for generations.

Building wealth will include saving and investing for the future. So borrowing money might not seem like the most logical thing to do if you are trying to build wealth.

You don’t want to be paying debts while trying to save and invest.

How then do you survive if you need to fund your masters abroad or fund that business idea?

The popular notion is to save towards it but what happens when saving towards it might take forever.

Perhaps thinking about ‘good’ and ‘bad’ debt is a useful way to decide whether borrowing is really your best option. Not all borrowing can be bad.

Good debt is an investment that will grow in value or generate long-term income. For example, taking out student loans to pay for a college education is the perfect example of a good loan. A college education increases your value as an employee and raises your potential future income.

Good debt should leave you better off in the long run. You can use it to build wealth, save money and make life a little easier.

It isn’t always realistic to use your savings for large or unexpected costs. So credit can be a convenient way to pay these costs over time.

An instance is if you need a new car for a ride-hailing job, but you haven’t saved up enough to buy one outright. You can buy an affordable car using a loan, which you repay over a set period of time. You will have to pay interest, so the car does cost more. But you’re better off because the loan makes it possible for you to earn a living.

The problem isn’t with borrowing, what should be addressed is the value for which you are borrowing. For example, you don’t need a car for work or you buy an expensive car with a loan, it is actually a bad idea.

Good debt should suit your needs and financial capability. Do you need an unsecured loan to fund that business idea? Fundall is the partner you need.