When the point comes that you need a payday loan, our lineup provides the top 10 options in payday loan services. However, if you can avoid ever needing a payday loan, you can avoid debt and high interest rates that, in the end, cost you more. The follow are our top 10 ways to avoid a payday loan and getting into debt.
Budget: Create a budget. Use your past bills as a guide and figure out how much you need each month for each bill, groceries, childcare, etc. – the essentials that you must pay. After you determine how much money you need for the necessities, you'll then know how much you can spend on other things. But don't just spend frivolously: decide how much you want to and can spend on entertainment each month, eating out, new clothes or fun toys. And of course, you'll then know how much you can put away into savings.
Track: Track your spending. Use spreadsheets, apps or good ole' fashioned pen and paper to keep track of where your money is going. This is one of the most important tips. It is extremely easy to nickel and dime your paycheck away and have nothing to show for it. If you keep track of every purchase – even the $3 cup of coffee – you'll know exactly where you stand and have a visual as to where your money goes. If you find yourself spending $60 a month on coffee, you may find yourself thinking twice about handing over $3 every day.
Prioritize: Pay your bills first and pay your bills on time. When you work with a budget, you already know how much money you need for your bills, but it's still wise to pay them before you make any other purchases. It's too easy to use the money that should go to bills when it is burning a hole in your checking account. So get rid of it in the right place. Pay your bills and avoid late fees or not having enough to pay your bills.
Expedite: Avoid paying interest. Speed up the paying-off process by paying more than the minimum because interest adds up on unpaid amounts. If you're paying the minimum a loan or a credit card with a large balance, you're likely only paying off the interest accrued, so if you never pay more, you'll never eliminate that debt. Again, figure out your budget and pay more than the minimum, even $20 or $30 more each time will eventually reduce the principal.
Eliminate: Stop wasting money. If you pay for television, you can cut those costly movie channels and even get a decent amount of channels with the most basic package. Eliminate wasteful driving: If you can walk there, get some exercise. Your wallet and your body will thank you. If you're looking for a movie night, renting a movie and buying microwave popcorn will be much less expensive, especially if you're taking your whole family.
Plan: Shop with a list. Before you go shopping, walk around your house and write down everything you need. Those impulse purchases of $5 or $10 add up, so avoid them entirely. It is also a good idea not to go shopping hungry. You may find yourself purchasing snack food that you don't need. However, if you work it into your budget, it's fun to treat yourself from time to time. Just make sure it's a planned treat.
Save: A rainy day fund is essential to avoid debt. Unexpected expenses happen, and if you don't have a little set aside, you may find yourself needing to borrow money. After you create a budget, you'll know how much you can put away into savings each month. However, don't put more than you can afford into savings or you may find yourself dipping into your saving just to make ends meet.
Research: Shop around and know your options. When it comes to important financial decisions, it is a good idea to look into the purchase. You can save hundreds throughout the year by making sure you're getting the best price. Many groceries stores do price matching and honor other stores' sale prices. The internet is a great resource. You can search websites to know what an average price for an item is, and then find a price close to or even lower.
Economize: Avoid brand names and paying full price. The most expensive option is not necessarily the best. You pay for a brand, but a similar, non-brand name product will likely be the exact same and cost half the price. Buy last season clothes, shop clearance and sales, and cut coupons. The difference will add up, and you'll likely not notice the difference.
Cook: Enjoy a homemade meal. Eating out adds up. Compare how much you spend each day eating out and how much you make each day. Chances are you're literally eating a good chunk of your paycheck. If you make your own lunch and cook dinner at home, you can save hundreds each month.
When it comes to your finances, awareness is key. If you know how much money you have, how much you must spend on necessities and where even dollar is going, you can get better control over your finances and avoid costly payday loans.