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Money Management

Payday Loans Are Not Just For Low Income Earners

There is the misconception that payday loans are for low income earners that constantly struggle to make ends meet. The truth is that a tough economy and even tighter job market have left many people, including high income earners, a little short of cash from time to time. When this happens, then a payday loan can be a solution for everyone. There are a variety of reasons why people, even high income earners, may need a payday loan.

Bad Credit

Having a high income doesn’t mean one has a good credit history. There are plenty of high income earners that have poor credit as a result of many things, such as bankruptcy, foreclosure or divorce. Payday loans don’t require good credit. In most cases, the only things required to get a payday loan are a proof of income, a checking account and a proof of residence. A payday lender will use your check to hold as collateral for the loan. Online payday lenders will secure the loan through a direct draft from a checking account.

Tougher Lending Standards

The criteria for lending money has also tightened up. Auto and home loans have collateral tied into them, but personal loans, open cash loans, don’t have any collateral or equity tied into it. Personal loans already require higher credit criteria, so any credit blemishes can result in a denial of a personal loan. Most payday loans don’t run a credit check, and if they do, their lending requirements are much lower. This doesn’t mean payday loan providers don’t have responsible lending policies in place, but on the whole, most are more concerned with employment history and a transactional account that’s in good standing.

The Economy

The economy is tough on everyone, including high income earners. Unemployment is higher now than it has been in many years. Those that still have jobs are dealing with reduced hours at work, which cuts their income. Each month, many people are finding themselves short on cash to meet their needs. A payday loan is a solution to short term cash needs, especially for high income earners. However, it’s important to stress the danger of using one payday loan to pay off another. This is not the solution. If you find yourself in a debt cycle, first things first, develop an action plan to get you back on track.

Convenience

Getting a payday loan for high income earners is also a matter of convenience. Payday loan decisions are instant. Most payday loans are approved within an hour of a submitted credit application. You can walk away with cash in your hand if the loan is taken from a store, and you can have the funds deposited into your checking account by the next business day if the loan is taken out online. Some people, including high income earners, don’t have the time to apply for a loan at the bank. Bank loan applications may require days to process before you are able to receive the funds. For some people, this doesn’t meet their immediate cash needs, and a payday loan is a better option.

Higher Income, Same Needs

High income earners need payday loans for the same reasons that low income earners need. High income earners have car payments to make, utility bills to pay, and high income earners also have emergency situations that require quick cash. Payday loans can get people the cash they need for whatever the reason, regardless of income.

5 Myths about Payday Loans

1. Payday loans are only for poor people

As you have read, there are many reasons why high income earners need payday loans too.

2. Payday loans charge high interest rates and fees

Payday loans do charge higher interest rates than a traditional loan, but the credit requirements are less strict, and you will get your money faster.

3. Payday loans surprise you with hidden fees and higher interest rates

Payday loans must disclose the terms of your loan just like any bank loan or other loan you may get.

4. Payday loans are embarrassing to get

There are many reasons why people of all income levels may need a payday loan.

5. Payday loans are impossible to pay back

As with any loan, only borrow the amount that you know you can pay back, including the interest rates and fees.

This article was written by Jaquie Dymock, Director Ferratum Australia, a payday loan provider based in Perth, Western Australia. You can catch Jaquie on Google+ as well.

Money Management

Vital financial tips for the financial poor – How you can be successful

Usually December is that time of the year when most people reflect on their past year’s mistakes and wonder what they can do differently in order to be successful in the coming year. But that doesn’t mean that you can’t ponder over your mistakes in the middle of a year. As we have passed through the first 3 months of 2015, there is still time to make some of the best financial decisions so as to emerge successful in this year. Wouldn’t it be great for you if you could get some of the expert advice from the financial experts who could just tell you what steps you have to follow? The concerns of this article will deal with some vital advice given by some of the best personal financial experts who have given their answers to the question, “What can Americans do in order to set themselves in the right path for achieving financial success?”

The answers of some of the most popular financial analysts

  1. Put an end to playing the role of a victim: Although the job market has improved than before, Americans still view themselves as victims of the job market and this is nothing but a negative tendency to continue playing the role of a victim. They even see themselves as victims to the sluggish economy and the uncertain future of programs like Medicare and Social Security. As per a successful entrepreneur named Robert Kiyosaki, this kind of mindset can have an adverse effect on your mind and prevent you from taking control of your finances. If you can’t find a job, challenge yourself and create a place for yourself.
  2. Save more and spend less: Apart from taking any other step, if you’re just trying to save more money throughout 2015, get back to the basics as it all comes down to the basic financial mantra of saving more and spending less. But this definitely doesn’t mean cutting down your expenses into half and living like a miser, it just means spending according to a frugal budget. It is not only the big savings that matters. First change your mindset and know that no savings small for you and it is the small savings that add up to create big savings fund.
  3. Look for ways to increase your income: One of the best and the most effective ways of boosting the chances of your financial success is by looking for ways to grow your income. It all depends on you to give yourself a rise that you’re worth in 2015. This might even mean mustering up the courage to speak up with your boss and ask him for a raise or starting a new business or looking for even a part-time job. Whatever you do, make sure it adds at least 5% of your entire income.
  4. Trigger off your high interest debts: When Dave Ramsey was asked for his advice for the financial poor who are looking for ways to become successful in 2015, he simply answered, “Pay off your debts”. According to Dave Ramsey’s financial philosophy, living without debts is the only way in which you can be financially successful. Make it a priority to repay all your outstanding debt in 2015 so that you can start off this year with a fresh new slate. If required, you can take help of a debt consolidation company that can help you with an alternative repayment plan.
  5. Set realistic financial goals: This is not an out-of-the-box advice but still there are so many Americans who don’t follow it. A personal finance journalist recommends people to be as specific and realistic as possible while setting your personal financial goals. If you’re planning to buy a home, don’t have any vague goal of saving an amount for down payment that you can’t end up saving. Instead some practical goal will work out in a better way. Try saving $250 every month which can be done by curbing your monthly expenses. Transfer this amount from your checking account to your savings account and don’t withdraw funds unless you reach your desired goal.
  6. Open a 401(k) or a Roth IRA: A senior financial correspondent says that if there is anything that you can do in order to change your fiscal situation, it is to save money in your Roth IRA accounts. Irrespective of which tax bracket you fall in, keep saving money in a Roth IRA and a 401(k). If your employer matches a contribution, it is even better for you and even if he doesn’t, you should still keep saving.

Therefore, when you’re someone who is planning to remain successful in 2015, both financially and physically, try to stay fit. Follow the effective strategies mentioned above to keep away from debts and stay on top of your finances.

Money Management

The Path To Financial Freedom: Get Your Mind In The Game

Into the Lake.

This is the first part in my series on how to get started on the path to being financially free.

In order to start being financially free, you have to start thinking financially free.

· Do you really think you are ready?

· Do you have a problem with living paycheck to paycheck?

· Have you taken any steps to try to control your spending?

You’re probably not going to be successful if you just said no. It’s the truth. This isn’t a financial diet, this is a lifestyle change. You’re life has to change to become financially free. You can’t buy whatever you want. There has to be boundaries to control yourself. If you don’t have boundaries how can you not spend too much money? What’s too much money you ask? It’s an amount that causes you to have to worry about paying your bills of necessity like rent or mortgage…or food.

Well since you’re reading this I’m going to say you’re probably ready to get on the right path. You have to prepare mentally to make it to the finish line. If you continue to think you can spend whatever you want because you earned it, you’re right. You can do whatever you want, but you will always worry about how you’re going to pay the next bill and you will always wonder where your money went.

Self control is hard but you must learn to do it. Learn that you don’t need the newest thing because everyone else has it or because it’s shiny. Don’t be a 2-year-old. Be an adult and be responsible. Yea it’s not the most fun thing in the world but I’m pretty sure our ancestors lived pretty well without anything that we have today, so I know you can do it.

When you get to 60 years of age you will hate yourself for having neglected your future. Sure it’s fun to spend all you want now but your future self won’t think it’s fun when you’re living in a 1 bedroom house with nowhere to go because you’re living on $1000 a month from social security….that’s if you’re lucky enough to still have social security around.

In all actuality becoming financially stable is more for your future than for your present. Are you ever going to want a house? or to take a vacation abroad? How? If you spend all that you have then this is never going to happen. And if it does happen then it will be because you are over extending yourself on credit and it will eventually catch up to you and make you miserable.

You have to create a balance between spending now and saving for your future. Sure you can live in the now but once again there are consequences to every action we do whether good or bad. If you spend everything now to have fun you will have a miserable life in the later years of your life. So start thinking about how you want your future self to live and how you’re going to make that happen.

So the first step is to start thinking about now. What are you willing to sacrifice now to prepare yourself for the future you want? That’s the question you need to ask yourself and you must answer it. Otherwise nothing is going to change and you’re going to have a miserable future….period!

What are you willing to/what have you sacrificed?

Check out the next part in this series The Path To Financial Freedom: Start Counting

photo credit: Cameron Cassan

 

Money Management

7 Tips For The Financially Young

RiskWhen just starting out financially there are a few things that you need to make sure that you do. These are all optional but life will be so much less stressful if you follow them. So listen to this  Financial Help For College Students.

  • Save & Invest: Save all you can when you’re young and don’t have as many commitments as you will when you’re older. Invest in riskier stocks because the payoff is greater and if all doesn’t go so well then you have plenty of time to make up any loss if it occurs.
  • Forget Life Insurance: My job currently provides life insurance to me for free, but if it didn’t I wouldn’t pay for it. Unless you have anyone that depends on your income it’s not necessary.
  • Get Direct Deposit: Don’t waste your time going to the bank every week to cash your check. It’s so much less time consuming to just have your checked deposited into a checking account and you can also have a portion of it deposited into a savings account so you don’t even notice it.
  • Get Benefits: Try and land a job with some benefits. The main ones you’ll want to have are 401k, health, and dental. Health is going to be the most likely one you’ll have with the new healthcare laws going into effect, but the other ones will definitely help you out. If you get a 401k through work make sure you at least contribute up to the employer match so you can get that free money.
  • Get a Degree: Any degree will do, 2 year, 4 year, even some kind of certification will help you land a higher paying job. If you don’t get a degree then see my last tip.
  • Don’t take life so seriously: Things are going to happen that are out of your control, don’t stress over it. Follow this tip and you’ll live longer.
  • Take Risks: Start your own business, Ask the girl you like out, Apply for that job you don’t think you qualify for. If you don’t do it, you’ll never know. Don’t live regretting that you should have done something. Do It!! I promise you will recover from any rejection in the long life you have ahead of you.

Do you have any  Financial Help For College Students?

Money Management

Is there an alternative to using a payday loan?

Very few of us can get through life without getting involved in some kind of loan application process.  Even if we don’t want to borrow money, it is more or less forced upon us if we want to buy a home.  But when it comes to borrowing smaller sums of money, there are several alternatives.  But before you decide which the best one for you is, consider your financial position and your circumstances.  It is not always the traditional ways of borrowing which are the best.

With a payday loan you are not just talking about a lesser period of borrowing but also a much faster processing time.  Long terms loans (mortgages, personal loans) can take weeks to process and intense credit checks.  Because payday loans do not involve the same type of credit checks, they may be easier to obtain if your credit is less than perfect. 

Companies like wonga offer a short term loan which is simple to obtain via a very user friendly website.  These types of loans are also a good alternative to using credit cards or bank overdrafts as the repayment date is set when you take out the cash advance.    Referring to these types of loans as payday loans is actually misleading.  A payday loan implies borrowing against your salary and some companies do this by taking post-dated cheques etc. to guarantee the loan.  A loan from wonga does not work in this way.  They check your details online and within minutes the money can be in your chosen account.  You then just have to pay it back, in full, on the chosen date.

But under what circumstances might a short term loan be useful?  Basically any situation where you have run out of funds and need money in an emergency.  Imagine the nightmare scenario that you are unable to pay the monthly repayment which is due on a long term loan like a mortgage. Missing this payment will not only cost you interest charges and fees but will immediately impact upon your credit file, giving you a black mark going forward.  And once you have a black mark on there, it is not that easy to get rid of.  Using a short term loan in these circumstances enables you to make the repayment, thereby preserving your prising credit history and without costing you a fortune in interest charges.  You simple pay back the money as soon as you have cash available, which has to be within a month or less. 

So there are plenty of alternatives to the unfortunately labelled ‘payday loan’.  A simple search online will give you plenty of options and it is up to you to choose carefully and only deal with the reputable, well known, branded companies.

Borrow in haste, repent at leisure so the old saying goes.  But this does not have to be the case if you research your chosen method carefully and comply fully with the payback terms.