More often than none, most working professionals, especially the younger ones may find themselves in a situation whereby they require to get small loans to see them through to the payday. This is an actual thing and why “Payday Loans” exist.
How do Payday Loans work?
Assuming you’re short of cash and can’t necessarily rely on family members or friends for soft loans and waiting for payday is not an option. So, you turn to your bank or a payday lender and request a loan. You get the required fund right there and some much-needed relief until your salary comes in and you have to pay the lender…with interest.
The issue with interest on payday loans is that it could run within the range of 50 – 100% which may be unreasonable. A payday loan may seem like a great way to stay afloat for a while without having to ask for handouts, but it doesn’t work well if you’re looking to secure your financial future.
So how do you go about avoiding the whole thing entirely? (payday loans and soft loans from your loved ones). We have a few tips for you;
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Take Care of Your Bills
You might think this is a no-brainer but the fact is that most people end up putting off paying their bills until payment becomes an issue. In the meantime, they spend their income like they have no ‘cares’ in the world. Next thing, those bills that are needed to be paid become ‘big’ emergencies and you find yourself in need of a cash advance ASAP.
Bottom line: Don’t put off paying your bills just because they’re not due yet.
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Stay True To Your Financial Capability
It’s ideal to actually give yourself treats, because you work hard, so you should play hard. But playing hard should have some restrictions that are in accordance with your income. Staying true to yourself by spending according to what you earn will help you to stick to your budget and do away with avoidable loans.
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If You’re Broke, Stay At Home
No matter how terrible the idea of staying indoor while in your 20s may sound, falling into the vicious cycle of payday loans is worse. Of course, you’re not expected to stay indoors all the time but creating and sticking to a budget for outings will help you stay in control of your spending.
Besides, there are numerous alternatives to going out all the time. Get together with friends at home on weekends or maybe have a sleepover. What really matters is the memories you’re making, right?
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Analyse Your Monthly Spending Habits
Do you really need that unlimited data plan? Should you be making your own food? Is drinking water so bad? Will you be better off using Uber only on weekend movements?
Taking the time to carefully think through your spending habits will definitely reveal grey areas where your cash doesn’t need to go. The truth is that you may be more emotionally attached to certain aspects of your lifestyle than actually having a real need for them.
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Finally, payday loans do serve their purpose by helping you solve unforeseen problems. However, once you find yourself always in need of cash advance before payday, you should seriously consider taking a new approach to your spending habits.