Loans: Emergency Money

Oh My God! I have spent all my pay check and I’m broke! I need to pay my bills, and I have no money left! I want to go to a vacation, but I am low in funds.

These are just some of the problems of anyone. Most people who experience these in between pay check problems are those who work and earn little but have many responsibilities, needs and wants. Sometimes they just occupy most of your thoughts that you end up looking desperate. Thinking of selling something you own, or maybe applying for another job. Just to have money.

Well, there lots of ways to acquire money. Selling something you own can give you money, but what will you sell? Apply for another job? What type of job? If you do get a job, your social life ad night life will be compromised. But there is this one way you can acquire money with just a few clicks of your keys and buttons of your computer and voila! You can apply for a loan.

Loans are very useful and are very in demand to everyone who badly needs money. They vary in different types.  There a short term loan, a long term loan and the most famous and easy to apply to type of loan – payday loan.

Short term loan as the name implies, is a type of loan that can be repaid in a year or less. Its payment method can be on a monthly basis and some other lenders have it on a weekly basis. The interest rate in the UK ranges from 200% to 300% annually or what they say annual percentage rate (APR). Many entrepreneurs use this type of loan for financial capital aid.

Long term loan is another type of loan that covers a long range of payment method. Usually it involves housing loan that is on a long term contract, thus, a long term loan is applied. Although interest is a bit lower than short term loan, still it payable on a long term basis. When computed, the borrower still paid a lot of money.

The most common type of loan is the payday loan. Payday loan originated in the US but is quickly growing in the UK. The popularity of payday loan rose in just a few years. It is very easy to apply for payday loan. The borrower will just have to prepare a pay checks and some employment records and you can then apply for a payday loan. Very convenient and can be done through the internet. The lender will deposit straight on your account your loan and when payday arrives, the lender will auto debit your loan from your account.

Whatever type of a loan a person uses or applies with, the main purpose of why they apply for loan is for the emergency money. Loan is very useful, very helpful but one must also be very vigilant of the loans they apply. Know of first the pros and cons of applying for a loan and be sure that you can pay on the time and date specified or you will not notice your interest went sky high.

As a borrower, you must be responsible of your loan and make use of your emergency money.

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Avoiding Debts and Managing Purchases

So it’s the middle of your pay period and you drop by your favorite boutique or your favorite department store and they have the best pair of shoes you have been eying being put on a discounted price of up to 70% off the original cost but only for a limited time. When you make the calculations you won’t make it until payday. You do not have the money to buy it now but in a week’s time, you will. What happens next is you either swipe your credit card and make the purchase anyway or opt to get a payday loan.

Impulsive purchases individually are not as bad as most people think they are. It is when they come in huge numbers that they become fatal to your budgeting and finance. You may start with swiping one card and then the next, and when the debt gets too much you tend to cover it up with a payday loan or use another type of loan to cover up another loan. The practice may appear like you are covering your financial mistakes but the bigger picture is you are actually burying yourself in debt.

It always starts with one item on sale and it goes to the next  and before you know it you have already maxed out your credit card. The movie Confessions of a Shopaholic did tackle financial wellness for women and confronted it with the biggest threat: Fashion sale. For men the items are much more expensive such as gadgets and cars. When the desire to make impulsive purchases is not managed well it can result to serious financial losses with serious repercussions.

A sale is not an emergency. Always allot cash for emergency situations because this will ensure your financial wellness even after you are faced with situations of dire need such as hospitalization or if in the event that you have issues with your salary that may take another pay period to resolve. Another important thing to remember is that the emergency fund is for emergencies only and an item on sale is definitely not an emergency.

The things that you want regardless of whether or not they are on sale can wait. The things that you need cannot. You can always allocate money for the things that you want and wait for the right time to have these items on sale. Only use that money allocated for your wants for these type of purchases. Do not become a slave to these purchases but make sure that you are the one in control of the things that your money gets spent on.

Managing your purchases is a very basic task but as the amount of money grows and your purchase power increases it becomes more difficult to control it because then you will have the capacity to by more things and more factors can cause your budgeting to go on disarray. Always remember that the small purchases that you make every day can have a huge impact on how your weekly budget will be and what your annual expenses will look like. 

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