Are Americans Spending Too Much on Payday Loans?
Small Loans on the Rise
Current data states that over 10 million households in the United States are struggling to pay back payday loans. One can only assume from this that people are spending more than what they earn. There could be a number of reasons why this figure is shooting up constantly. Payday loans are increasingly meeting demands from people who seem to run out of money frequently, and the costs that people incur on these loans are high.
Are Declining Wages to Blame?
There is no doubt that companies have looked to cut costs during the recession. While some people may have faced wage cuts, others may have been laid off. Sudden changes in income or even the complete end of an income can affect the quality of life for many. But are people really changing their standards of living to meet the decline in wages? Or are they simply trying even harder to keep their high standards of living alive while going into debt even further? This is a question that every person facing a decline in wages must ask themselves in order to get out of debt.
Small Debts Look Big
The average income in the United States is about $30,000 to $40,000 a year. Whether this income is sufficient to meet all the needs in life depends on where they live. For example, those who live in small towns may be able to manage on this income, while those living in larger cities may end up struggling with the same amount of money. Housing costs alone can take at least a third of their income, leaving them with little room to maneuver for other expenses. Under the circumstances, looking for a payday loan to act as a supplement to the income is certainly not a bad option.
Look to Payday Loans for Help
If you are struggling just to meet your monthly expenses and you have nothing left over for the essentials, maybe taking out a payday loan will help. The money is available for short periods and can be paid back with your next paycheck. Payday loan lenders are more willing to lend again to someone who pays back their loan on time. Debts tend to emerge when people start misusing the easy credit that is available as an option for higher expenses. When people start spending $500 or $1,000 above and beyond their income, they ultimately end up in a huge debt and complain about payday lenders.
Reduced Expenses Reduce Reliance on Loans
When your income is reduced, one of the first things you need to do is cut your variable costs, and expenses that are not essential should be cut first. Look at your entertainment costs such as cable and internet—are they higher than they should be? This means that if your cable bill is extremely high, you need to look at getting rid of the channels that you are not using. And if you really cannot afford the high speed internet, find other ways to access the internet that will be easier on your budget. Even cell phones can be replaced with a land line, such as using Vonage. If you still find yourself short of funds, there is always the payday loan that is available within a matter of hours to help you find more money for essentials.