People losing their beds to Payday Loans: but who’s to blame?

In today’s economy, almost everyone is struggling with money and finances and the growing popularity of payday loans have increased unsustainable levels of personal debts. Although consumer advocates condemn the practice as a whole and while some state laws issued guidelines or even ban payday loans, it still has enormous appeal to people who are already hard-pressed to pay their debts. Sadly, these are typically low-income people with few assets and who do not understand the high interest rates that would likely trap them in cycle of credit dependency.

Payday loans are fast, no credit checks needed, can be discreet and it’s everywhere! At a local outlet, over the phone, internet and some loans can even be approved overnight. There are more information of the accessibility of payday loans more than the information about the possible harm it can cost. So some people even use payday loans just to feed their impulse to buy things that they don’t have but don’t necessarily need.

Let’s face it. We make irrational decisions when it comes to money, we overspend shopping using credit cards, but manage to stay in budget when we use cash. Day to day expenses like: $5 Starbucks coffee, $10 movie, $20 for a book or the latest fashion magazine may be small, but at the end of the month, or in a year, you would realize you’ve spent thousands of dollars for books/magazines, collecting dust in 1 corner of your house.

The key is you have to know where your money goes. Get motivated to create budget – a budget knows where your money goes and would let you create a spending plan. But no matter how many books you read about budgeting, or keeping spreadsheet to track your weekly expenses, you have to be determined to stick to your budget plan.

How? You need to consider some psychological factors. Why you feel happy and elated buying new things, or why the smell of a new leather have endorphin-like effect on you? You have to examine and ask yourself what does money mean to you.

The bottom line is attitude. What you have does not determine your self-worth. Give up the urge to splurge. You have to create a positive attitude with yourself and your money. We may have our own story to tell about our experiences, different needs in life, or we may even say that “living within your means” may be easier said than done, but it is always prudent to make your finances under control so you don’t need to take out payday loans or any other quickie credit products to meet your emergency needs.

While payday loans can be useful for emergencies, it is a short term solution. Keep in mind that the loan is not taken out for a year, but for a few weeks. The faster you can pay it back, the better. There may be credit reduction programs everywhere you can turn to, however, when you really have to opt for payday loans, borrow only as much as you can afford to pay with your next pay check and still have enough to make it to the next payday. Payday loan, tax refund loan, etc., is addictive, dangerous and predatory. And the consequence is literally punishing. Who’s to blame, is a question everybody could answer.