How to Avoid Borrowing

Payday dollars are a great short-term solution to your cash flow problems. In the long-term, here are some tips to help you avoid a dependence on borrowing.

Save, Save, Save

Savings are an inexpensive and sensible alternative to payday dollars. If you don't save, it is in your best interest to start. Most experts recommend saving 10% of your income, but you can start with a smaller percentage and work your way up. For example, you might start by saving 3%-5% of each paycheck. When you encounter gaps in cash flow, you can then turn to savings instead of payday dollars.

Budget

It's impossible to plan and set limits on your spending without first knowing where your money goes. Make a goal to keep track of everything you spend for at least 30 days. At the end of this period, divide your expenditures into categories and then total up your monthly expenses for each category. This will help you identify areas of overspending that might be driving your need for payday dollars. Once you have monthly spending categories, you can also impose weekly or monthly caps on each category.

Exhaust Your Alternatives

Before turning to payday dollars or other loans, make sure you've exhausted all other potential sources of cash. For example, do you have a friend or family member who would be willing to loan you the money you need? Would your employer be willing to give you an advance on your paycheck? Try to remember these cheaper alternatives before you request payday dollars or other types of debt.

Minimize Interest Expense

Paying interest is almost like throwing money away, and it can be a serious drain on your cash flow. Try to pay down the balances of your debt as quickly as possible to avoid excess interest expense. The money you save on interest is money you won't have to borrow in the form of Payday Dollars and other loans.