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Payday Loans and Credit Card Debt: Who Is Controlling What?

payday loans are short-term loans

Where does your money go? Paycheck comes in and bill payments go out. Who is in control? Most folks would like to say that they are in charge of their money, but if they do not know where their paycheck went, that idea might just be wrong. Do you know what you use your credit cards for? Do you know how much you owe towards them? How many short-term payday loans have you used to get by throughout the last year? If you are one of the many who are living in debt, you may be in denial as to who is in charge of your income.

One of the best ways to discover where your money goes is to track your expenses. Add up all your monthly bills and expenses and subtract from your total take-home income. How much is left over? Can you account for what is missing from your wallet or back? Where are the leaks? If you don’t track down every purchase throughout the month, you may be spending money which should otherwise be set aside for payments. Some of the biggest culprits are trips to convenience stores, added trips to the grocery store; drive-thru lines as well handouts to family members. Your children’s allowance should be accounted for within the budget. Once you can get a real look at where your money goes you will be able to start plugging the leaks.

Keep payday loans out of long-term plans.

You may have to take a reality check and make changes to some spending habits. Are there particular days of the week that money leaks faster than others? Would a grocery list help limit trips to the market as well as cut down on eating out? If you pack your lunch and snacks for road trips would you be able to pay down some of your debt instead? These changes may keep you from needing to use credit cards or online payday loan lenders when the end of the month comes around. If you think about it, omitting third party money from your monthly expense account will save you even more. You will limit how much interest you pay each month and have more of your income to use as you see fit. It is then that you will gain control of your hard earned money. Right now, your cash is being funneled into the creditors’ and lenders’ pockets. Can you see the problem now?

It is important that you budget for all your income. You can pay yourself so there is pocket money for some of those extras; it’s only fair as you earned the cash. How much should be determined by what you have left over after all your living expenses are paid for. Place all your bills into categories and earmark a figure to cover the expenses. Make a plan for any money left over. Will it be used to pay down debt? That would be smart. Would you use it to fund a savings account? That works great too. A trip to the mall to catch the latest sale instead of paying down your payday loan lender is not the best choice.

Do what it takes in order to take back control. You will need to change some habits. Remind yourself that your purpose is for a good cause and reward yourself for a job well done…in cash. The last thing you will want to do is add more debt to the budget now that you have finally gained control. Make a plan to stick to your new found financial freedom. You will want to have short-term, medium and long-term objectives to build your financial portfolio back up. Your credit score and future financial needs will thank you for it.



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