Payday Loan Tip #4: Cope & Don't Borrow More

Cope With a Cash-flow Gap Without Borrowing

If you are about to be late with a rent, utility, or mortgage payment, take some time to talk to the creditor. If the bill does not carry interest, ask if you can make a payment arrangement. You might be able to delay the payment until your next paycheck arrives. You also may be able to set up a repayment schedule that allows you to stretch out your payments over time. Before agreeing to this, though, ask if there are any fees or extra costs for the service. Remember that getting behind on your payments on your bills could cause your credit rating to drop.

Some employers will allow you to have an advance on your paycheck. This is not a loan, but it is actually money that is taken out of the amount of your next paycheck. If your employer allows this, keep in mind that there may be a limit on how often you can request an advance.

Do not purchase expensive items until you have the cash available to do so. Even if it is a car repair that you need to have done, you can often put that off a few months by taking public transportation. You can also look into a carpool arrangement with other co-workers who live near you. This gives you the chance to collect the cash you need for the car repair.

You can always use your emergency savings instead of borrowing, but you must remember to repay yourself like you would a creditor.

There are also local charity and community programs designed to help families who cannot make ends meet. Take advantage of these. Also, you can sometimes apply for assistance programs for certain bills, such as your utility bills.

If you can, take on extra hours or work to earn more income. Overtime pay is a great way to add to your income. If you own something valuable that you no longer need, sell it to allow you to pay your bills.

Another option is to adjust your withholdings on your check so you have more money in your paycheck each week instead of getting a big tax refund at the end of the year. However, do not withhold too little, because that will cause you to owe taxes in the spring. If you can get an Earned Income Tax Credit, find out if you can get that credit paid in each check instead of at the end of the year at tax time.