Payday loans have seen a huge increase in business with the troubled economy. If you have been hit severely by the economic storm, its time to make a plan to recover financially. There is no easy way to nurse your wounded credit except to pay off all your debts and start an investment plan. Start with the high-interest bearing payday loans online. Make all your online payday lenders happy by bringing your balance down to zero. Then settle the low-cost payday loans you secured from your friendly online payday loan lenders. When all your debts are paid, then it is time to be proactive and look for ways to increase your wealth.
When you have settled all your payday loans online and have a little cash left over, be prepared to receive financial advice from well-meaning or scheming family or friends. There are many financial truisms being floated out there, with some even becoming urban legends. You need to learn to separate the wheat from the chaff, or in this case, the myth of the truth, before taking action.
Payday loans must be part of your money management strategy
One of the myths being peddled is that making a budget is a waste of time since you will not follow it anyway. The truth is that it is not the budget which is the problem – it is you. Money management is largely dependent on character, and a little bit of financial savvy. You will be making some hard choices that you have defined in your budget. If you build a strong character, there is no plan that cannot be executed, unless it based purely on luck. You need to learn to say “no”, which will be one of the most difficult words in the dictionary. But you will reap the rewards of following a well-designed budget.
Another well-established myth is the belief that debt is a tool to financial success. This is simply not true, a lie peddled by banks and financial institutions that have brought them profits. Child psychologists say that a sign of high EQ (emotional quotient) in children is the ability to delay gratification for better returns. A child with a low EQ will throw a tantrum if he is refused a toy. It is the same with adults. You want a brand-new car now, so you agree to fork over a portion of your income every month.
If however, you delay your longing and save up for a second-hand car, most dealers will even give you a discount for paying in full. At the same time, going forward, you free up a substantial amount which can instead be used for investment. Keeping up with the Jones’ is just plain dumb as they are likely broke. So when you have paid all your payday loans online, stay away from online payday lenders. They will just pull you back to the same muck that you just got out. Being debt free is how rich people become rich.
Online payday lenders are benefiting from the myth of cash advances and payday loans are needed by the less-fortunate people. The truth is far from it. In fact, the ridiculous interest rates alone will ensure that the debtor will stay or even slide further down from his current economic standing. Once you start, one low-cost payday loan will not be enough. The average borrower is a recidivist, taking out 8 payday loans a year. This will cost him over $500 in interest alone. The sad fact is that these loans are not used for an emergency; instead, they are used for everyday expenses. If you belong to this bracket, you should stay away from payday loans.
Money management is a skill that everyone should learn. If you are financially-savvy, you will never be acquainted with online payday lenders. Learning about common financial myths will teach you that it does not pay to start borrowing low-cost payday loans. Be smart enough not to get in bed with online payday loan lenders. It’s not a relationship worth having.