There are times in our life when we could do with a bit of extra money. One option to get it is to spend less so that we can put extra money aside to pay for the items that we want. Another option is to take out a loan. There are advantages and disadvantages to both.

Being frugal means that you try not to spend very much money. It means that you may go without things in order to save money. So you may not go out so often, have so many holidays, buy so many clothes and things like this. It could also mean you try to use less electricity, shop in cheaper places and generally spend less money in all ways that you can. For many people this may not sound like much fun. Going without things may sound bad, but actually you do get used to it. You can also replace things rather than going without so you still have items, but just cheaper ones. Once you get into the habit of not spending so much it is a lot easier. You stop desiring things that you cannot afford and enjoy the fact that you are managing to save money up and will be able to manage without borrowing in the future. In fact it can feel really good knowing that your savings pot is growing and that you are working hard in order to achieve this. It is also a good life lesson as if you are frugal, you will always be able to save some money up or at least not spend more than you have and it will allow you to be a lot better off.

Of course, if you decide to be frugal and save up for things, it means that you cannot have everything that you want right away. If you do want things that you cannot afford then you can get a loan. This means that you can start enjoying the benefits of the item right away. You will have to pay it off over a period of time, but while you are doing so, you can still be enjoying it. However, because of the costs and interest on the loan, you will have to pay more for the item than you would if you waited for it. Depending on the cost of the loan, this could be quite a bit more. You will need to calculate how much more it will cost and whether you think that it is worth paying the extra money for it, so that you can have it early.

Of course, decisions like this are not always made practically. You may have emotional reasons why you want to buy the particular item. This may be a big influence on your decision to want to have it quickly. You may also need the item to really improve your life. It could be that you need a car for a job and cannot afford it without borrowing. It would probably be better to borrow the money and take the car and the job, rather than saving up for the car and having to turn down the job, particularly if the alternative is no job at all or a lower paid job.

So the decision is not always a straight forward one. You need to consider the items that you want to buy and whether you can wait for them. If you can then saving up will be a cheaper option and waiting to buy something can actually make you appreciate it more because you have had to work hard to get it. However, it never hurts to be as frugal as you can so that you build up some savings and if you need items in the future you will be able to get them without having to borrow money. It can be a good feeling knowing that you are building up some savings and therefore if you do need a big purchase in the future you will be able to pay for it without having to borrow the money to do so.

A loan is probably an easier option in the short term. You do not have to think about saving up for an item you can just borrow the money and go out and buy it. However, you will have to repay the loan and the interest plus any charges. This could be quite difficult. Unlike saving, you will have to pay it every month or else you will be charged even more. If you are frugal and save instead, you could find that you are short one month and you may be able to borrow form the savings or save less that month. It will also give you more time to the purchase and decide whether it is something that you really want or not. You may decide that you do not want it after all and you will be able to use the savings for something else instead.