Dealing with Consumer Loans (Forbrukslån) and Finances

Økonomi, which stands for finances in Norwegian, is a very important word. Finances, in a manner of speaking, are what keeps the world moving and society spinning on its axis. Of course, this can sound sad at first, but it is a reality that we will have to face eventually, since the more independent we become and the closer we get to the working world, the more we will be able to notice this.

Money is important. It allows us to buy the food we eat every day, and what pretty much grants us a place to live in, with a comfortable bed, electricity, gas, and water. Without money, we can’t have access to a great variety of amenities that can pretty much determine, not our happiness, but how comfortable our lives are.

Sadly, our financial stability is also capable of determining how close we are to achieving our dreams and fulfilling our goals. 

Buying a house or apartment, getting to take care of our parents without any worries, purchasing that one video game console, computer, or expensive phone, or even being able to buy clothes that are not as expensive… Depending how much money you have can decide, to a certain point, how we live our lives and the things we have access to.

It is a crude way of thinking, however, and I do admit that I felt a certain level of discomfort when I understood how society works. But instead of worrying about it, I decided to work with that in mind. 

As someone who once struggled to even eat a proper meal for a breakfast, to someone who is now facing the working world with everything I have… I understood three things: firstly, how important savings are, secondly, how learning and understanding the basics of investments can change someone’s life, and lastly, how loans can turn into shortcuts to success if used correctly.

That is why Økonomi is so important, and the reason behind this article. In this article, I will talk about these three aspects of finances, and showcase the reasons why you should keep them in the back of your mind.

1. Making Sure Your Efforts Mean Something

There’s a problem with how most people think about money: they spend it without thinking too much about the long-term aspects of their lives and the circumstances that might arise without prior notice.

Imagine this situation: you just got paid, and you made sure to separate your monthly expenses from your payment so there’s nothing to worry about. Now you know for sure that all the money left can be used, and you decide to buy some clothes, shoes, or appliances. You are happy, of course, but then suddenly, an important family member gets sick, and he or she can’t cover up the medical expenses.

This happens a lot… And it happens because people don’t think about the future. All the efforts they put into their work are just meaningless at this point, just because there’s no way for them to deal with the situation because they placed the rewards provided by their efforts in the wrong bag.

Saving is the best countermeasure to deal with such situations since it is what gives meaning to your efforts through discipline and consistency. Of course, I’m not saying that you shouldn’t buy that weekly Domino’s pizza every Friday or get that HD T.V you have been craving for… But you should make sure to save some money monthly, for the sake of achieving your goals or facing undesirable situations.

Saving is very easy, as long as you understand how to manage your expenses. Still, if you are having trouble with it, you should consider visiting https://www.wikihow.com/Save-Money. for a more detailed guide on the matter.

The most important aspect of saving is that it is a very safe method of amassing wealth, but it can be considered slow, so some people might want to engage in something else while saving, for the sake of speeding up the process of amassing money. And that is investing.

2. Investing, a Bet for the Sake of Success

Now, investing is pretty similar to saving, but there’s some risk involved in the process. Investing is all about placing money into something for the sake of generating a much greater profit. Usually, the riskier the investment is, the more profit it can generate, but this rule does not always apply. 

There are many different methods of investing. Some people invest money in real estate, for example, while others purchase equipment to create a company and provide a very specific service. Others might invest currency to create a business that sells a product, while others might buy goods like collectibles, precious metals, or stocks…

The options you have for investing are too many to mention them all, but something you have to understand is that investing requires knowledge, expertise, and experience, and it is something that cannot be done lightly.

The reason is simple: an investment can always fail. A good example of this those who decided to invest in the cryptocurrency known as BitCoin. I remember a time in where a single BitCoin could be sold for $19,000, but its price dropped to $7,000 at a time. Nowadays, a single BitCoin costs around $36,000! 

That is why knowledge is important. Without it, you are more likely to make mistakes that will end up in money loss. The more knowledge you obtain, the easier will be for you to understand the basics behind the investment you are going to make, thus, it will increase your chances of making a profit.

Overall, investing is a very efficient way of generating profit for the sake of amassing money, but it can also make you lose a lot along the way, and that is why it is perceived as a bet. However, you can also rely on a much safer bet, and that is a loan.

3. Loans, the Shortcut Towards Your Goals

Loans, simply described, are credits received by organizations that manage money, for the sake of helping their clients fulfill a goal or achieve a dream. Of course, they are not doing it for the sake of it since they do receive profit from it.

The amount of profit they receive depends on the services they are providing, as well as the terms of the contract and the type of credit they are giving to the client. There are many different types of loans you need to keep in mind like an unsecured consumer loan (forbrukslån – uten sikkerhet). These are loans that are considered risky by lenders as there are no collaterals. These are used to purchase goods or services and tend to have very simple requirements.

The contrary can be said from a house loan (often called a mortgage) since they commonly need a lot of requirements, just because the amount of money between those types of loans differs quite a lot in quantity.

Now, the reason why a loan can be described as a shortcut is simple: the amount of money you can receive can be used to achieve your dreams very quickly. Of course, the money you receive will need to be paid in the long-term, but you can benefit from it and start amassing money as soon as you use it, without having to put yourself under poor circumstances because you can pretty much decide the terms of the contract with the organization behind the credit.

Of course, each method showcased in this article has its advantages, but a loan can provide incredible benefits if dealt with care. With that said, some people might misuse them, so as long as you have a solid idea of what you want to achieve with them, and you have the means to pay up the money without complications, you will be fine!