Guides

Managing Your Debts Until Payday

Calendar with white piggy bank

The problem we find is that when looking at money management trends it shows that most of our spending happens before payday.

Payday itself is structured in a way so that you work for a whole month living of your own funds, and are then essentially reimbursed for your labour afterwards. Hence you start and continue your job with a deficit. This means that you have already spent your money on necessary items, as well as luxury items before payday arrives.

Necessities such as food, accommodation and transport are the areas that are almost impossible to cut back on, unless you move, but then that can become counterproductive, as travel costs could then outweigh any savings.

The advice is to stick to a very tight budget each month, but most of us like to spend our leisure time/quality time with friends or our significant other doing something special for example eating out at a nice restaurants or enjoying a movie. Also, it’s not always easy to work hard without a reward. The gifts we buy ourselves when we’ve successfully completed a project at work, too the treats we buy to get us through that particularly hard week at work, are at times all technically classed as essentials, as they keep us motivated to get up for work each day. Where would we be without them! Although they do all add up.

Then there are the emergencies that can’t wait till next month, and as we know it’s bound to come in threes. Where will you find the money for a new exhaust for your car, or a leak in the roof of your home? Earning a regular income unfortunately doesn’t always mean it’s possible to stay in the black each month.

To manage this kind of financial crisis, you need to work towards managing your debts. If you can work out your incomings and outgoings each month and set a budget, that would be a great place to start. This way you will know how much you have left over each month to spend on luxuries and emergencies.

If you find your outgoings are higher than your incomings talk to a debt adviser as they may be able to help you reduce the amount you pay towards debts each month. Remember to always pay priority debts for example rent and mortgages plus council tax, as sadly you could lose your home or go to prison if they are not paid.

Sometimes your budget can be working really well, debts are paid off and emergency savings are starting to amount to a healthy sum of money. Yet emergencies can still pull the rug from under your feet and leave you with little to no money to live off that month. If friends and family are unable to help, and long term loans are not an option, then Payday loans can fill the gap perfectly, as long as they don’t then leave you in debt again the following months. If you can pay off the debt in time and the loan gets you out of a difficult time sensitive situation, then a Payday loan certainly has its place.

In times of emergency a Payday loan can help in the following ways:

Time Scale

In an emergency time is of the essence. Cash Float states that clients can receive the amount applied for direct into their requested bank account in as little as 2 days. That is as long as everything goes smoothly.

Fixed Markup

The second reason is that Payday loans have a fixed mark-up, and instalments are deducted from your pay on your designated payday, making the process easy and stress free. The instalment period is also short (6-12 months), and as a result, the loan will not hang over you for a prolonged period of time.

Safety net

A safety net is basically an emergency fund/savings. Unfortunately, not everyone is in a position to achieve such financial security and that’s where a Payday loan becomes a safety net. This is especially true when you’re new to the world of work. For example, when graduates are employed for the first time, it’s very unlikely that they’d of had the chance to save any money. In fact they will probably owe a considerable amount in student loans. That first month before payday can therefore be quite tough.

Conclusion:

Payday loans are an option open to the employed and if used properly are a great way to way to make it through to the end of the month when emergencies arise.

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