Payday Loan Practicality – May Be A \”No\” For Some Folks
by
Holly Petherbridge
Did you use payday loans a little too much last year? You are not alone. There are many payday loan customers who use more than 5 fast cash loans in a year. If each loan averaged $300, with just five loans the fees would approximately be $225 when the total amount was paid off on the original due date. There is always a price to pay for convenience. As we start the year off, there are some practical measures which can be implemented in order to keep any extra money in the bank.
What could you do to prevent the need for multiple payday loans?
*Create a spending plan. This practice is best represented in a budget format. Fit all basic living expenses into categories, list the fixed amounts and average the variable costs. Don\’t let it confuse you, if you are unsure as to how to set up a budget, there are free credit counseling services available to help or search the internet for \”How to set up a budget.\” Take it one step at a time, you can do it.
*Save! In this budgeted plan, make an extra category for saving. If you look at the payment as one more bill that you have to pay on time. For many people, it is a mindset. Look at the savings payment as different as a mortgage payment, it has to be paid.
*Don\’t borrow to pay debt. Consolidation sounds like a perfect plan. Put all your bills into one smaller monthly payment. There is a down side to this action. Those who continue to spend and add to the pile of debt end up increasing the numbers instead of reducing them.
*Cut back to prevent payday loan usage. These loans are typically only for a few hundred dollars. If you can cut back on expenses, extras and within your food costs, you will quickly save up the that money in order to use for yourself later on when financial troubles pop into your budget.
*Don\’t cosign on a loan. You are working to get ahead of the game. Co-signing on a loan could prevent you from doing this. The last thing your budget needs is to add a new category of paying off a friend\’s debt.
*Don\’t turn your back on debt. Debt doesn\’t disappear just because you aren\’t looking at it. If you think the payday loan fees were a tough figure to swallow, then you will not want to look at what raised interest rates, late fees, possible garnished wages and years of bad credit might do to your finances.
Besides trying to avoid the need for payday loans to boost a bank account, you may want to avoid larger loans while you struggle to pay for debt you have already accrued. It\’s tough to get back on solid financial ground. Make your plan, stick to it and consider it a financial diet for the New Year; your future finances will depend on it.
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