If you are in business by yourself then you will have a firm appreciation of how important it is to have money coming into the business all the time. You need to be cash rich in order to be able to take advantage of certain business situations where you are offered too good to be true deals and these are things that you can’t walk away from as a competent business person. You need to strike while the iron is hot and the only reason that you’re getting a huge discount is because you are paying for everything upfront. Even in people’s normal daily lives, there are always great deals to be had if you are prepared to pay for everything in full because there is a preoccupation with credit nowadays and it is leaving both people and businesses in difficult situations.
The thing to remember here is that the advantages of paying up front work both ways and so this is something that is not only good for you as a business owner, but for your customers as well. For example, you can get the Health Insurance Lump Sum Price which is significantly lower than paying your health insurance policy over the course of 12 months. The following are just some of the situations where you might find it more prudent to pay for everything upfront.
- Your credit cards – If you keep making just the minimum payments on your credit card bill every single month, then you’re going to be left with a balance that is never going to go down and you will still be paying off your credit card bill 3 to 4 years from now. If you get an opportunity to get hold of a wad of cash quickly because maybe you were lucky at the bingo or you had a big win on the local lottery, it would make more sense to settle your debts and pay off your credit card bill all upfront so that you can avoid all of that interest that will be added onto your account if you don’t.
- Your mortgage – The same rules apply here as above except that we are talking about a significant amount of money because you have purchased a property. Over the course of the lifetime of a mortgage, you can expect to pay at least double the price that you will quote to buy the property in the first place and so if you can get hold of the lump sum as a result of an inheritance or maybe by re-using your holiday fund, it makes no sense to hold onto that money and put it into the bank. You will save yourself an incredible amount of money over the remaining lifetime of your mortgage and this makes a lot more financial sense.
These are just two examples where paying everything upfront is the better option and there are numerous more. It doesn’t matter if it’s health insurance, credit card bills or the payments on your mortgage because paying all of the money initially is going to save you an incredible amount of money over time.
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