Save Now To Avoid Payday Loan Lenders Later

You finally have enough income so that you aren’t living from paycheck to paycheck. Going to payday loan lenders is a thing of the past, right? Maybe, but don’t bank on it.

Now that you have some extra income, it’s time to make sure you won’t have to pay the high interest rates that payday loan lenders charge. When you finally get some financial breathing room, the natural tendency is to want to loosen up the budget and pay for things you couldn’t afford in the past.

However, the time isn’t right for that yet. You need to start saving up some of that money to protect you and your family. You’ve been going with a tight budget for awhile, you can continue for awhile longer.

Most experts recommend saving up the enough money that would cover your living expenses. That should probably be your ultimate goal, but that will take awhile and you don’t need to look that far ahead yet.

First, you want to make sure you won’t need another payday loan anytime soon, so keep your budget as tight as possible until you save the same as one paycheck. This way, when an emergency comes, instead of going to the payday loan lenders, you go to the bank and dip into your savings.

Make sure you keep it in savings. This money needs to be quickly accessible for an emergency. If you stick the money in a CD, it will keep your money locked up for months and you will be charged expensive fees if you take it out early.

If you don’t like the low amount of interest you get at your bank, you may be able to find higher interest rates in savings accounts at online banks or a local credit union.

Stay away from payday loan lenders by saving for a rainy day

Now that you have enough to cover a paycheck, you can loosen the purse strings somewhat. However, you still want to continue to put money into savings each month; preferably with each paycheck.

A good rule of thumb is to put 10 percent of your paycheck into savings. If you can’t do that much, determine a reasonable percentage and put that in your savings account after each paycheck. If you have direct deposit through your employer, see if you can set it up so that a percentage of each paycheck is deposited directly into your savings account. This way, you’ll never see that money in your checking account and won’t be tempted to spend it instead.

The key is to be consistent and faithful with your savings. Don’t let yourself get discouraged if an extra expense does come up that prevents you from putting anything into savings one month. This is what that money is for anyways.

However, make sure to get back to saving money as soon as you can. You want to build up that savings to the full amount as soon as you can.

When you do reach your goal, it’s OK to celebrate for a little while. However, don’t go crazy and then set your sights on any debt you have. Take the amount you had been putting into savings and use that to start paying off your debt with the highest interest. Continue this approach until you have all your debts paid off and hopefully that will mean you will never have to go to payday loan lenders again.