You may need to use a quick loan, or a short-term lending solution, from time to time. Quick loans are not a long-term solution to managing your finances. Don’t forget that taking out a payday loan means that the next month paying it back, plus the interest, will use up a good part of that month’s wages. Quick loans are not a lending option you should look to use repeatedly. Let’s look at how to avoid quick loans.
Live within your means to avoid quick loans
We’re not trying to be patronising here. It’s not always easy to live on your basic income, especially if you have a family, or dependents, and unexpected expenses. It is important to try and keep spending on non-essential items to a minimum if you are on a budget.
It’s disappointing to live without luxury items, family holidays, or nice cars. But, if purchasing these items leaves you struggling from month to month, and having to go into debt to then pay for essential items, then the luxury items are just not worth it.
The stress and strain of being in debt can cause health and family problems, and result in a spiral that is difficult to get out of.
Increase your earnings to avoid quick loans
Again, not easy, moving jobs or asking for a pay rise simply might not be an option. That’s quite normal. You may be able to increase your monthly income in other ways.
Take over time or a part-time job
Can your employer offer you more hours, or can you take extra hours to supplement your main income elsewhere? If you have a week day job, taking on bar, hospitality, or retail work at weekends might be just enough income to stop you from getting into debt. Even if it’s only on a short-term basis.
Depending on your skills, freelancing, or working from home for extra hours could be an option.
Rent out a room or a parking space
If you live alone or have a spare room, can you rent it out? You would need to investigate this and of course make sure your tenant is someone you can safely, and happily, live with. If you live near a University or College, there may be students looking for simple, homely accommodation.
If you live in a city where parking spaces are in high demand there are websites where you can rent a parking space, if you have one. If you are renting you would need to ask permission from your landlord.
Good budgeting can help you avoid quick loans
There are many family and finance budgeting guides on the internet. Research the best way to manage your own budget.
Start by making a list of your total earnings including your salary, benefits, tax credits, any rental income, pensions, or student loans.
Then tally your outgoings, include your bills, rent or mortgage, any credit repayments, insurances, groceries, phone bills, subscriptions, and anything else you spend money on a regular basis.
Think about your leisure and entertainment expenses. If you eat out, socialise, attend a gym, shop for clothes, or buy movies, whatever it is, note these costs separately. Consider if you can afford them.
How much money is left over after the essentials? After essentials, you should consider putting some money aside, if you can, before you spend on any luxury items. Make sure your leisure and entertainment spending, known as disposable income, is within your budget.
If your essential outgoings are more than your earnings you will need to look at how you can reduce them. Begin with things that are not absolutely essential like phone, and TV packages and subscriptions. Can you reduce your grocery bill by shopping at a different store, or planning meals? Can you reduce your electricity, or gas bills by turning lights off, or your thermostat down on warmer days?
You should never put your family in danger or go hungry. If this is a concern seek advice on how to budget effectively.
Avoid quick loans by managing your utility bills
Money can sometimes be saved by switching utility providers and taking advantage of offers. Take some time to look into the utility providers out there, and work out if switching can save you any money.
Avoid impulse buys
Making an impulse buy, without planning or comparing prices, can use up income you may need. Always take the time to make a purchase, especially a high value one, shop around, and consider if you really need it.
Manage Christmas or vacation spending
Christmas time and holidays are two high-value purchase times that can create or lead to debt. Try and save money, rather than using credit cards or loans to cover these times. Decide if a holiday is essential, or is it better to wait and save. At Christmas, be careful not to spend too much, often a family gathering and a special meal is far more important than gifts or toys that never get used.
Deal with debt and avoid quick loans
If you find yourself in debt and are struggling to get back on your feet seek professional advice. Look at how you can reduce any debt by budgeting, and paying back debt as soon as you can. If you can make additional payments to pay off debt sooner, do so when you can.