Say No to Same Day Loans

Life is full of big and small emergencies. This is just a fact of life and it's important to be prepared. So many Americans rely on credit cards or same day loans services when they find themselves strapped for cash. Although there are differences between credit card companies and payday advance loan companies, they both charge interest and make money from your misfortune. You can prepare yourself and be ready with an emergency fund; it's not as hard as you think.

It might seem impossible to imagine that you could have $1,000 set aside for emergencies. But here's how you do it. Sit down with all of your monthly bills and add them up. Are your bills more than your paycheck? If they are not, that is great news and what you'll do is put the excess money into a savings account. Just because you have money does not mean you have to spend it. This money is the start of your thousand dollar emergency fund. If, like most people, you find that your bills are bigger than your paycheck, you need to start cutting expenses. Rank your bills in order of importance. Important things like rent and food and transportation are at the top. As you get all the way to the bottom of your list of bills see what can be cut. You may not believe it but there will be things that you could cut out. Even if it's just $50 a month, that's a good start on your emergency fund.

You need to make sure that you are motivated to build up this emergency fund. It is too easy to justify buying that latte. You might want to take a look at the same day cash loans or online payday loans interest rates. You will see that if you build out that interest-rate over the course of the year, most of them are about 400%. It doesn't look that way in the short-term course, because generally the repayment structure for cash loans/same-day loans are for a week, or 14 days at most. In the fine print of the contract, or buried somewhere on the website, you can find the actual interest-rate and you'll be shocked when you see how big is. Certainly credit card companies interest rates are nowhere near as astronomical as a payday loan company, but that does not mean that taking a cash advance on your credit card is a better choice. It is simply the lesser of two evils. Instead you should opt for the third choice of building and maintaining a small emergency fund.

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