A payday loan is usually an expensive loan. Payday loans should only be considered for emergencies. Try to avoid these loans if at all possible.
It is a good idea to honestly review your spending habits. How do they compare with your income level? Do you spend more than you make? Do you spend almost everything you make? Are you able to save any money? Do not spend more money than you are earning.
Next, evaluate your purchases. Do you go out to lunch everyday at work? Bringing your own lunch can save you a lot of money over the course of a year. If you buy lunch for $5/day and work 22 days/month, you are spending $110 a month. You can make lunch yourself for a very small fraction of the cost.
It is a good idea to avoid impulse purchases. Often we buy things that catch our fancy in the moment. Sometimes we will be truly happy with the purchase. Mostly though, we either regret it or the item sits in a closet or on a shelf, unused. This can run into quite a bit of money over time. Try to get in the habit of delaying your purchases to make sure you really want the item, and can afford it.
If you really need some extra cash fast, look around your home. If you have unwanted items, you might consider selling them. If you have collectibles, you probably want to bring them to a consignment shop or sell them on eBay. If you have a lot of things you could bear to part with, have a garage sale. By doing these things you will clear out some space in your home, and you will get cash for doing that.
Consider using coupons. Restaurants and businesses often send coupons through the mail. Look through the value pack and your Sunday newspaper. Clip coupons for groceries. You may find coupons for everything from plumbing repair, to haircuts, to half off dinners at local restaurants. Do not feel embarrassed by using coupons. It does not mean you are cheap or poor, it means you are a smart consumer. Why pay more for the same item?
You should review your home services. How much do you pay for your cel phone? Do you really need to have unlimited text messages? You can probably get a cheaper package. How about your cable package? Do you really need all the movie channels?
You also want to avoid the “I deserve it” trap. You deserve to live a life free of debt collectors hounding you. Just because a television commercial tells you that you need to have the latest, greatest, newest (insert product here) does not mean you really do. If your cel phone is still working, why do you need to get a new one? Often, you can get a free phone when you renew your contract with the cellular service provider.
One of the areas people tend to cut out when they are looking to cut costs is basic maintenance. But that can be more expensive in the long run. Do not skip oil changes for your car, or dental cleaning for yourself. These things can keep you from having more expensive repair work done later on.
A fun experiment to try is to promise yourself to buy only staples for a month. By doing this, you will be able to see how much money you throw away on frivolous things. You may feel a little deprived at first, but after a short time, you will be able to weed out what you really want from want you think you need.
One of the more important habits you can get into is to “pay yourself first.” If you have a regular job, you can probably set up direct deposit at work. This means your check is deposited automatically into your checking account. What many people do not realize is that you can usually set up two or three direct deposit bank accounts. Set up a savings account at the bank where you have your checking account. Then ask your Human Resources department how to go about having a portion of take home pay deposited into the savings account. You probably not even notice the difference in your paycheck, but over time, the money in that savings account will grow. It is a good idea to have between 3 and 6 months salary saved up in case of emergency.
Finally, the best thing you can do is to be a smart consumer. If you really want to have something, save up for it, or buy it only if you have the cash. If you cannot afford something, save up for it. Do not go into debt to purchase a new big screen plasma TV. Your financial health is more important. Developing good savings habits, and being smart about your spending will prevent you from needing to get a costly payday loan.
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