Does your household budget support your monthly finances or do you realize that sometimes there is “too much month for your money”? Seeking the help of a payday loan for a little extra cash to get you through the month isn’t a bad thing, unless your budget doesn’t allow for it. Sometimes it can be difficult to manage your money, even with the help of a short-term loan. But when you understand how to manage your money and can stay in control of your financial budget, a few simple solutions may be all you need to get back on track and work toward paying off a payday loan.
The first thing you need to know about money management is that you need a budget. While the act of budgeting isn’t all that difficult, some people don’t like to sit down and face the reality of how much money comes in and out of their finances each month. Once you can control how much you earn and spend each month, it will be much easier to pay off your payday loan, as well as any other bills weighing you down. The first step in doing this is to collect bank, credit card and loan statements for the last three months. This will help you determine how much you’ve spent in the last three months by adding up all of your costs and dividing that amount by three to get an average. Have you discovered that you are spending more than you earn? It doesn’t seem possible, but that’s what happens when you have to take out short-term loans, borrow credit cards, or delay car payments because your cash flow is running short.
Once you’ve come to an agreement on how much you really spend each month, create spending categories for all of your expenses. It is always advisable to have a “miscellaneous” category that allows for those recurring or unexpected expenses; maybe a quick cash payday advance. Also, create a category for regular car maintenance, dental visits, or anything else you do annually, semi-annually, or even every three years.
Next, determine the difference between “wants” and “needs” in your spending. This is a difficult question even for the best of budgets. A mortgage or rent, utilities, food and gas are all necessities. Those are things you probably can’t cut out of your budget. Cable TV, fancy cell phones, and gourmet coffee every morning are, on the other hand, something you should be able to live without. You may have to bite the bullet, so to speak, and cut some of those items out of your spending. The money you save by giving up certain items can help pay off a payday loan or maybe even prevent the need to borrow in the first place.
Also, take a look at your credit card statements to determine what kind of strain using your credit cards has put on your budget. These handy plastic shopping tools can command a high price in the form of interest. In the long run, you’ll end up paying a lot more for what you buy if you can’t pay off your balance every month. The sooner you pay off your credit cards, the sooner you’ll have more money in your budget each month. In any case, pay more than your minimum payment, but remember that paying off your payday loan should also be a priority. If you can’t pay cash for an item, then you probably can’t afford it!
There are times when emergency costs arise. It’s best to set aside some money each month in a savings account for these situations. If you have to take out a payday loan, make sure you can afford it with your next paycheck and that your budget supports this type of loan.
