Are you in dire need of money?
If yes, then payday loans might entice you! Provided, that payday loans or pdls are legal in your state!
No doubt, payday loans can offer you instant money without any credit score requirement! But it can burn a hole in your pocket by its incessantly high-interest rates.
But the main question is, what can lead you to opt for a payday loan? A financial setback? Or a lack of proper financial planning?
Whatever it is, you don’t need to worry now! I will help you how to manage your finances accordingly. So that, you can stay away from payday loans and ultimately, don’t fall prey to the debt trap!
Here you go!
Create an emergency fund
Can you forecast your future?
I hope your answer is gonna be a big “NO!”. Well, I know we all don’t want any mishaps in our life! But you know, buddy, life is uncertain and anything can happen at any moment! So, it’s always better to prepare for the rainy days.
Now, you might ask me that is an emergency fund a panacea to get out of any future mishap?
No, it’s not! But being financially prepared can help you to tackle any mishap in a better way. Financial advisors will suggest you save at least 3 to 4 months of your basic expenses in your rainy day fund.
But I would ask you to start putting aside for your emergency fund, even if the amount is nominal. With time, you can put aside more dollars in the rainy day fund.
If you need financial help urgently, you can use this fund to cover sudden expenses. This way, you don’t have to rely on payday loans payday loans, if any mishap occurs!
Plan a 50/30/20 budget
“A budget is telling your money where to go instead of wondering where it went” -Dave Ramsey
Yes, that’s exactly what happens when you don’t follow a budget! At the end of the day, you can’t find out where you have spent your dollars. A budget helps you to chalk out a proper spending plan. And thereby, you can track your dollars and stay away from overspending.
To manage your finances in a better way, you can plan a 50/30/20 budget! At first, you need to calculate your after-tax income and divide it into three categories:
- 50% for your needs: Necessary bills and stuff you need to buy for survival.
- 30% for your wants: Things on which you want to spend but not essential. For example, dining out, going out for a movie, buying something expensive, etc.
- 20% for your savings:This is the most important part of your budget. You should save 20% of your post-tax income for investments, emergency funds, retirement fund contributions, etc.
“Cash is king”
Do you believe this?
If you don’t, I would suggest you to consider this as your mantra to save money! Because, in today’s world, it’s very convenient to use plastic money, especially credit cards!
I mean, why not? You can buy whenever you wish to by just swiping your cards. But do you know that you might end up overspending by using plastic money?
Yes, you heard it right! A study reveals that people tend to spend more when they use plastic money! The reason being, it gives false security that you have more money than what you have in reality!
As a result, you don’t realize how much you are spending. And you come out of smoke and mirrors after going through your credit card bill statement.
So, it’s better to use cash whenever you go shopping. This way, you can stop spending on unnecessary stuff. And you can save those dollars for your well being
Manage your debts wisely
Debt is that part of our finances, which we all want to avoid. But somehow, it becomes a necessary part of our financial life.
But you know what, there are some good debts and bad debts too! If we talk about good debts, there are mortgage loans, student loans, etc.
By taking out a mortgage loan, you can get the security and stability of owning your own home. Plus, by obtaining a mortgage loan, you are buying an appreciating thing.
By taking out a student loan, you are earning a higher degree. And by doing so, there are high chances that it will increase your earning potential.
But if we talk about the bad debts like credit card debt , payday loans, etc., you are losing a substantial part of your savings. Maybe, it’s giving you a temporary enjoyment by spending money. But at the end of the day, you have to shell out more due to its high-interest rates and other charges.
In this context, let me ask you one thing! Do you know what is the minimum credit score needed to opt for a mortgage loan?
According to the Federal Reserve Reports, 90% of mortgage loans in our country taken out in the first quarter of 2019 were made by the home buyers having a minimum credit score of 650. And 75% had a credit score of 700 and above.
So, what will you do if you don’t have such a credit score?
Well, using credit cards can help you to achieve that! Yes, you heard it right!
Charge your credit cards for small amounts and pay off your outstanding balance amount in full. And that too on time! If you pay within the grace period, you don’t have to pay any interest!
So, why will you shell out more by paying off late?
Use your credit cards wisely! Trust me, you will see a noticeable change in your credit score after a certain time!
As you can see, it depends on how you can manage your debts and use it for your well being! And if you master the art of managing your debts wisely, you won’t need any urgent money help. The reason being, you can plan your budget accordingly and paying on time means no need of paying hefty late fees!
Live within your means
When was the last time you swept up by your friend’s social media life?
Remember that you are not looking at his/her whole life and the struggle which he/she has gone through.
Now, to live your life like that, you might be relying on credit cards or fast cash options. Let’s say, you are going out for a vibrant nightlife and paying your bills by credit cards. But you know what, it’s going to add stress to your financial life.
Rather, strictly follow your budget and live your life in such a way that you don’t need urgent money. Most importantly, be happy with what you have in your life. You are special, you are unique, my friend!
So, what are you up to? Learn how to manage your finances with the above tips. And make sure you don’t need urgent money every now and then!
And make sure, if you need financial help urgently, you can handle the situation without taking out pdls. Else, you might be trapped with the payday loans!