There may be times when you just don’t have enough money to last you until your next payday. It’s bad enough if it’s just a one off for whatever reason but if it’s every month and you’re struggling to pay your bills then you really need to get some help as soon as possible. Don’t think that by ignoring the problem that it will go away or magically get better.
The fact is that the longer you leave it, the harder it is to sort out and once you face the facts that you do need help everything else is a piece of cake.
I wrote about the things you can do here last year but what’s prompted my post about the subject today is an email I got earlier in the week offering to pay me to advertise a payday loan company on my blog. Clearly this isn’t something I would do given that I’ve posted in the past about how much I’m against these types of companies as I think they prey on people who are desperate and feel like they have no other option. It’s these people who I think can almost blind themselves to the extortionate charges that the companies make because they think they have no alternative.
The problem comes the next month when you have to pay it back – lots of these companies will tell you that if you can’t afford to pay it back, that’s no problem. They’ll extend it for you for another month – a very high charge.
It’s so easy for it to spiral out of control though and I wanted to share a story that one of my regular readers shared with me after my original ‘Say no to Payday loans’ ranty post. It was one of a few stories that people emailed me but this person just seemed so broken by the whole experience and there was just nothing I could do or say to make it better.
Basically, this man had used a payday loan company because he was self employed and didn’t have as much work on as usual for some reason and he needed some extra money to see him through to the next month. By which time he would be back to normal so he could afford to pay off the amount of the loan the following month.
The next month, he couldn’t afford to pay it back because his work hadn’t picked up as expected so ended up paying extra to extend the loan. It spiraled from there as his work didn’t pick up as quickly as he thought and a lot of what he was actually making was all going to the loan company to extend the loan for a few months. Unfortunately this meant that some of his other bills were going unpaid as the loan company were quite aggressive when trying to collect their money so he prioritised them over other essential bills.
He then couldn’t afford to either repay the loan or pay extra to extend it so the debt collectors were called in. He lost his business (and very nearly his home) and ended up in massive debt as well as being diagnosed as suffering from depression because of all the stress. The effects on both him and his family were huge – all for what started out as a quick and easy solution to a ‘temporary’ problem.
The effect that taking our a payday loan had on this man was devastating and I know his story is extreme but I don’t think he’s the only one who’s been affected in this way. Some of the other emails were from mums just like me who had used a payday loan to see them through the month because they’d overspent or had an unexpected bill. Whilst not nearly as devastating as the man who lost his business, the knock on effect for them when they had to pay the money back was just as serious. One lady had to take out an actual loan to repay the payday loan back which meant that she would be paying it back (with extra interest) over a longer period than just the month she’d originally thought and another ended up having to ask her parents to pay it back for her as she had no other means to pay it back.
So, I guess what I’m trying to say is that if you think that a payday loan would be a quick fix for you, please please remember that it doesn’t always work out like that. And if you do take one out, make sure you’re aware of exactly how much it will cost you to pay back and be very sure that you can pay it back by the date you agree with them.