Payday Loans in Canada

Want to Avoid Pay Day Loans? Follow These Budget Tips

21st September, 2009 - Posted by admin - No Comments

Pay day loans are well and good for emergency situations like accident hospitalizations and unexpected funeral expenses. However, these cash advances on your paycheck can take a substantial toll on your daily finances with its lending fees and rates, which can often be as much as 25 percent of the total amount borrowed. (Some companies charge $25 for a $100 loan)

List Them Down

Often, your out-of-control finances stem from your inability to keep track of the cash flow. This, in turn, makes you look to pay day loans to remedy the situation, which only makes it worse than ever. And so the vicious cycle begins.

With that being said, you have to list down your monthly income and expenses. For income, list the regular income that flows through your bank account. These can include your monthly paycheck, alimony and child support, interests on savings account, investment income and profits from home-based business.

As for expenses, list all things that you spend money on. You must include anything and everything, from rent/mortgage, food, household cleaning materials, subscriptions to utilities and the newspapers, to little indulgences.

For both income and expenses, don’t include one-time deals as these are not part of your regular cash flow. Definitely, do not include the proceeds of pay day loans on your cash flow!

Trim It Down

When you deduct your expenses from your income, you ought to see a modest positive difference. If you don’t, then it is time to do something about it – trim it down and trim it down quick!

These are the expenses that can be the first casualty of your budgeting efforts:

Out-of-season fruits which are expectedly more expensive than those in season. Besides, it’s healthier to eat according to the climate according to the health experts.

Take-out Indulgences like Starbucks coffee, donuts, and pizzas. The pennies will add up to greater dollars, you’ll see.

Branded household items, which possess the same cleaning properties as the generic ones. Better yet, make your own!

Subscriptions to newspapers and magazines. Just log on to their online versions for free.

When you add up all these expenses, you will delightedly discover that you don’t need to take out payday loans just to make ends meet. Also, to trim down your expenses, you can avail of discount coupons for grocery items and company-sponsored health care plans.

Live Within Your Means

This is such common sense advice that it is almost embarrassing to say it here. Nonetheless, living within your means is a surefire way not to take out pay day loans even in times of emergencies!

This is because you have money saved for rainy days, which came from the excess of your income over expenses. Even when your income increases, strive not to increase your expenses proportionately. You will find that your savings will increase faster, which means that you will have no dire need for pay day loans for a long time yet.

In the end, you will benefit from your cost-cutting measures especially when you consider that the recession may not be over until the end of the year.