Thoughts on Debt

Well, the government has been on this band wagon for years.  They have been looking to rid themselves of the payday loan industry claiming that they are ripping people off.  Don’t get me wrong they do charge exorbitant rates on their loans, there is no doubt that this is true, however I can’t help but wonder if they really are just angry because that is money that they are losing each year, and they don’t want the competition.  Think about it, you can pay $15.00 per hundred to borrow from a payday loan place, or you can possibly bounce a check and be charged $35.00 so really is that so unreasonable.  Plus many of the people who choose to take out payday advances are people who can’t get approved for government loans with lower interest rates, so what are they really losing, if they aren’t providing services to these people.

Now many states have completely banned payday loans making them illegal, but many more states are trying not to completely do away with them, but merely limit the terms, interest rates, and number of loans a person can take out.  One such reform in the state of VA has a lot of payday loan companies scrambling to find new services to provide and new ways to get around the coming laws.  With many people paying them millions in interest every year, they are not sure how they will make it, and many people are worried because a new database will not allow you to have more than one loan at a time.  The concerns are great, but the best advice I can give to you is if you currently hold a payday loan, find out about the changes in your area, and be sure to get the facts.  It is a good idea to begin paying your loan or loans back now, so that you don’t get stuck after the first of the year.  Some companies will change the game in 2009 and others may have to close their doors completely, so be sure you get out of this system before it is too late!

If you have entered this financial crunch with a bag full of debt in your hand, then you are probably starting to rip your hairs out by the roots.  It is frustrating enough to have the cost of everyday items rising daily, but in addition to that having debt that you are trying to pay down can feel like a ton of bricks on your chest.  Well, there are answers and options for you.  Of course you will want to do some tight budgeting to see what extras you can eliminate, the more money you can put towards paying off your debts right now the better.  Financial anaylists don’t think that this financial crunch is going anywhere soon, so working hard to pay off your debts now will pay off later.

If you have assets that you can borrow against, don’t.  Right now if you house is paid off, then just work to keep it that way.  Don’t over do, you don’t want to potentially lose your house to pay off your credit cards.  Better to keep the house and consolidate your credit card debt into one lower monthly payment.  Most debt consolidation companies can easily help you reduce the interest rates, and get you an affordable monthly payment.  Then you need to work hard to try and pay more than that minimum payment every month, and if that means that you need to cut back in other areas of your spending then do it, and if that means that you need to pick up a second job or sell off your old record collection, then do it.  The time to resolve your financial issues is now.  Don’t waste any more time getting yourself and your family on solid ground.  You need to do it now.

Also, if you are already in over your head, stop spending.  Not on the necessary items, but on all the unnecessary ones.  Take the time to shop more wisely.  It takes a little more time and patience to do this, but it is a definite rush when you get the item for the price you want or even less than that.  Shop online, use all available resources to save money.  Shop clearance racks, discount/wholesale outlets and big box stores.  Take that money that you save and put it back to your credit card or into a savings account.

Avoiding your debt, won’t make it go away, and spending more today will only worsen the problems later on.  Take action today, and have a clearer, easier financial future down the road.