Manage My Budget

If you thought paying for college was a challenge, wait until you discover the joys of making ends meet on an entry level salary. While you may not find yourself to be financially comfortable for a few years, you can start off on the right foot by setting a budget as soon as you negotiate your salary of your first post-college job. Make sure that you sharpen your pencil (and get rid of all luxuries) if you find that you won’t have any fun money left after meeting your obligations. The next steps are below:

1. Never pay bills after the due date. There are fees and interest charges attached to balances when you miss your due date by even a couple days. What’s more, your almighty credit report could take a hit as well. If you’re not sure why a respectable credit rating is important, try getting a car loan or a lease on an apartment without one. If your credit score is good, you’ll likely see better rates for car insurance and loans, too.

2. Use credit cards wisely. If you don’t trust yourself, don’t use them at all. While it’s good to accept a low-interest credit card (without an annual fee) and use it to establish a positive bill-paying history, it’s foolish to squeak by and only pay the minimum due every month. Before you know it you’ll be in over your head in debt and the interest charges will make paying the card off seem impossible. While it’s okay to take a couple months to pay off big items, don’t let it snowball into a bad habit.

3. Start the habit of saving right away. You’ll be surprised how quickly you wake up and find yourself halfway to retirement. Honestly! Start out small and increase your savings with every pay raise. Ask your boss about the company savings plan and let your savings grow that way, too. In most cases the money is matched by your employer so the balance grows quicker.

4. Don’t fall into the debit card trap. A debit card may look like a credit card, but the funds come directly out of your checking account. If you don’t keep track of what’s coming out by balancing your receipts every other day or so, you could fun into an overdraft situation. That means you don’t have enough money in your account to pay for your debit card purchase. The result is fees on top of fees. Think about this: a latte at your local coffee shop could end up costing you about $40 if you don’t have enough money in your account.

Independence, financial and otherwise, is what you’ve worked so hard for all these years. Protect your identity by keeping your social security number to yourself and shred your mail with financial account numbers on them. Spend only what you have and push yourself to save along the way. It isn’t always easy to be financially responsible, but it is always rewarding.

Jon Ross is an economics instructor who runs seminars on scholarships and online degree programs for adults.

Do you need help getting out of payday loan debt? When you compare the calendar and your bank balance do you feel like there is no end in sight? Thousands of people take advantage of the convenience of payday loans every year without fully understanding how payday loans are structured. In the end, many find themselves struggling the same way you are.

People who do not qualify for traditional loans, or those who need money faster than a traditional loan can be processed are often the ones who take advantage of short term loans. The often outrageous interest rates charges by payday lending companies is meant to discourage borrowers from using their service in a long-term way.

Many consumers, unfortunately, do not understand the basics of payday lending. Some unknowingly agree to loans with the assumption that the interest rates will be manageable and very near what they can find at the local bank or credit union. When in reality, many payday loans have interest rates well above 100%–which can make an impact on the amount owed quickly.

Once the cycle has started, how do you stop it?

First, do not allow yourself to be lured by an extension. When you extend a payday loan, you are charged an extension fee (typically $90 on a $300 loan). This $90 does nothing to pay down the principle of the loan. On your next due date, you will again owe $300 plus another $90 in interest.

Pay off as much of your loan as possible, even if you are unable to pay your loan in full. Any amount you are able to pay toward the principle will save you money in the long run. You may be able to make these arrangements online, if not, you will need to ask a customer service representative.

Avoid taking a second loan to pay off the first at all costs. It will not solve anything. Instead, work to pay down the original loan by making small payments toward the principle when possible. Nine times out of ten, a company will find a way to work with you if you are having trouble making your payments and you are sincere about repaying your debt.

Need help getting out of payday loan debt? Let me show you how I did it.