Payday loans can be a great tool to get you out of a short term financial issue, but they come with a cost. With interest rates often exceeding 500 percent, they are very costly. Because of this, they should only be used in an extreme emergency.
If you find that you are needing payday loans often, you need to make some changes and you need to make them now. We can help you make these changes but it might involve a little bit of sacrifice on your part. What you need to do is establish a balanced budget that leaves room for saving.
Establish A Budget
It is amazing how many people do not have a budget. They just pay bills when they can and spend however they like.
This is a recipe for disaster and, if you do not have a budget, this is probably the chief reason that you have grown to depend on payday loans. You need to know what you are spending your money on so that you can know how much you actually have to spend each month.
Take a few minutes and write down all of your bills. Include set amounts for things like entertainment, food and savings. When you are done, compare your total to your net income and see how things look. Chances are things are tight or you are even spending more than you make.
Now comes the hard part, making changes to your budget. Lucky for you, there are a lot of ways to make these cuts to your budget and small things can make big differences.
Your Food Budget
This is the easiest budget to trim, especially if you are accustomed to eating out at restaurants.
Take your lunch for example. Even if you just eat fast food every day, you are at least spending 8 dollars a day for a meal, possibly much more. By comparison, you can bring your own lunch to work and eat very well for just 2 dollars a day.
This represents a potential savings of 6 dollars a day, 30 dollars a week or 120 dollars in a month. A big savings not only in money, but time. Think about how much time that you spend simply going to get your lunch. What could you do with an extra half an hour a day?
Meals out are another area that can really wreck your budget. If you need to get out of a payday loan cycle, this is something that you need to reduce or eliminate. A single person can easily spend 25 dollars dining out at a restaurant and a family of four can spend nearly 100 dollars.
Finally, take a look at your regular grocery bill. You can save a fortune by doing two things. One, start meal planning. Plan out all of your meals for a week, including snacks, and make your grocery list from that. This will allow you to buy only what you need without any waste.
The second thing that you can do is switch to some cheaper bases for your meals. Things like potatoes and rice can be had for pennies a serving and can make dozens of different dishes.
Your Entertainment Budget
The next easiest area to cut is your entertainment budget. If you go out frequently, you should limit this or change the way that you entertain yourself.
Sure, you still have to go out and have some fun, but you may need to limit yourself. Instead of going to the movies, go to the dollar theater. If you go to the bar with friends, nurse a drink or to and choose bars with great happy hour prices.
Also, take into account your at home entertainment. If you still have cable or satellite, cancel it and save 100 dollar a month or more. Switch to a streaming service for just dollars a month and still get your entertainment, just in another way. There are even free choices such as Crackle that can entertain you for nothing.
Your Other Bills
Every bill needs to be gone over when trying to balance a budget.
Look at your insurance bill, for example. When was the last time that you got a quote from another company? You might be surprised at how much you can save because rates vary wildly among companies. Some even offer new client discounts that can save you big over your first year.
Your vehicle itself is another potential savings area. You need to get that budget balanced and lowering your car payment may be what you need to do. This might mean trading it in on a cheaper vehicle or it could be simply refinancing it if you think you can get a lower payment.
One final bill to look at, although there are more, is your rent or mortgage. People get into trouble with housing because they often want to live at a higher level than they can afford. Living slightly below your means could mean saving hundreds of dollars a month in rent or mortgage payments. Consider if you could downsize and save. It is a tough choice bur one that you may need to make.
A Disciplined Life
Establishing and sticking to a balanced budget takes discipline. One has to realize that they can only live as good as their income will provide. Trying to live beyond your means will quickly lead to financial ruin. Yes it will take discipline and some sacrifices, but being able to cut your dependence on loans and having the security of a savings account is worth it.