Payday Advances: a Word of Advice

By: Jone Player
This is a lesson... a lesson on responsible borrowing. Everything is so apparent in hindsight, isn't it? Some people seem just naturally adept at managing finances, saving money and planning their future months or years in advance. But for many of us, it's a struggle. A lot of this information is passed down from generation to generation, rather than learned in school, so if your parents weren't good savers, you likely won't be either (unless of course, you take the initiative to educate yourself). Chances are, we may not even realize how bad we are at managing money - we may feel like everything is happening beyond our control or that there's no way out. Here is some simple advice that will help you out in the real world where money is difficult to make but easy to spend.

Rule # 1: Only borrow what you can pay back within the month! Remember getting that first credit card in college? What a sense of awesome power and freedom! You sure could buy a lot of fast food, beer, text books and clothes with that - all the while only paying ? 10/month! Not only that, but these kind blokes were raising your credit limit several times a year, trusting you with more and more. In retrospect, you can see how this sort of system encourages irresponsibility and spending beyond your means. Sure, you could pay that ? 10/month, but it will take you forever to pay off the full balance... and all the while, interest is being charged on that exorbitant balance! Yikes. When you borrow with a payday advance, you are encouraged to pay your lender back within 14 - 30 days, so it is imperative that you take as little as possible.

Rule # 2: Wait on that vacation! When we want something, we often want it NOW. It's easy to look at that ? 1400 pay cheque and think, "Surely I can use ? 400 of that to visit my friend in Paris for the weekend. I've worked hard and I deserve it." Everyone deserves a break, of course, but not when it infringes upon your weekly budget. In many cases, if you save just ? 30/week, you will have ?1440 by the end of the year, which is enough for a suitable vacation. A little bit of saving can go a long way. In fact, if you were to save ? 20,000 over the course of one year at age 26, you will have ? 1 million by the time you retire. So, in other words, don't use payday advances as an excuse to party or vacation. But if you run upon hard times - and you know that things will be better in a week or two if you can get help today - then, my friend, borrow away.

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