Does anyone not know someone who struggles with money, lets you know they do, and then turns around and pulls out the latest iPhone?

These are the trade-offs we make.

Having money is all about having options. But even if you’re Sir Peter Jackson you still have to make trade-offs, since the funds you sink into something could possibly be better used elsewhere.

When you’re making money decisions, it can help to think about all the other things you could be doing with it. It was somewhat startling when a friend looked down at the drinks on the café table where we were sitting and said, “For the cost of this I could make dinner.”

Now, some trade-offs are certainly more stark than others – like if you had to skip buying groceries because your car needed emergency repairs. But everyone has their choices to make.

One choice is to buy things on tick, which comes with interest and fees (add these all up using our loan calculator). Credit is convenient. But saving now to spend later instead means you can enjoy your money more down the line.

  • Staying interest-free when you buy your flat-screen can give you enough money for the TV… and a few months of Sky to go with it.
  • Avoiding interest and fees on a holiday can give you the holiday… plus a posh meal or two.
  • Dodging the interest and fees on a car loan can give you the car… and a few trips up and down the country.
  • And if you can minimise the interest you’d end up paying on your mortgage… well, the difference can be your retirement fund.

The decisions we make every day matter. What trade-offs will you make?

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