We are getting closer to concluding this series on credit provided by personalmoneystore.com’s payday loans money blog.

We hope that the information provided thus far has been helpful to you in obtaining, reviewing and understanding your credit report as well as how credit works in general.

Now that you have reviewed your credit report, you may have found some errors. These errors, insignificant as they my seem, can prove devastating to your financial options over time.

Imagine what you would save on your home mortgage payment if your interest rate was a 1 to 2 percent lower. Your credit score can make a big difference on rates such as these, so working toward improving your credit score by fixing any errors can save you lots of extra money over time.

Finding Errors On Your Report

We all make mistakes, including our creditors. When creditors report your personal information to the credit bureaus, and when the credit bureaus update your personal credit report, mistakes are sometimes made that can cause you as the consumer to suffer undeserved consequences. Therefore, you must take ample time to look over your report to assure its accuracy.

Choose Your Errors Wisely

When reporting errors, you will want to pick and choose your disputes wisely. If you see a discrepancy such as the wrong creditor’s name or a recorded date on an older account that is inaccurate, it is best to leave these undisputed, as these issues do not have any real effect on your credit rating.

Additionally, remember when you dispute an error on your credit report, make sure you have the necessary documentation to back it up. Failing to have adequate support for your claims will get your dispute discarded as well as any other dispute that you file in the next 12-month period. So report only those errors that have a negative bearing on your credit rating.

The Law is on Your Side

When it comes to your credit, the law is on your side. If you have a dispute and the documentation to prove it, the credit bureaus must do their part to resolve it, or they will be held in violation of the laws protecting consumers. Be sure to make copies of everything you send to the credit bureaus so you have the necessary means to force the issue if your dispute fails to get addressed appropriately.

The Most Common Mistakes You’ll Find

1. Creditor Information that is InaccurateUsually errors such as these don’t matter a whole lot, but if you are insistent upon eliminating the error, request that the item be deleted. The bureaus will then delete the information or contact the creditor to verify the mistake in question. Therefore, if at all possible, try to clear the error with you creditor first before making the request to the credit bureaus to edit your personal report.Don’t expect to find all your accounts on your report. Some accounts, such as those established with payday loans lenders, don’t typically report information to the credit bureaus.
2. Inaccurate Credit LimitsIf you see that any of your credit limits are higher than they actually are, you will want to report them as inaccurate because it shows you have more financial liability than you actually do.
3. Inaccurate Account TypesIf you have closed an account that is reported open on your credit report, this too can hurt your credit rating. Some inaccuracies, however, may actually help you in your pursuit of good credit, such as a loan that you may already paid off that has duplicate entries on your report. This will only show that you have been consistently responsible. Leave it alone!
4. Inaccurate BalancesContrary to the above, if you have a account that you owe money on that is reported twice or more on your report, this will hurt you in that it shows you have more outstanding debts than you really do.This is a common scenario that often happens with consumers who have been turned over to collections. A credit report will show two accounts owed, the account with the creditor that turned them over to collections and the new collection account. Both will show the same debt.If this happens to you, you can have the original account deleted as the original creditor has sold your account to the collection agency.
5. Inaccurate Reports of Delinquency or Late PaymentsThese errors can hurt you the worst. If you see a late payment or delinquent account on your credit report and can prove otherwise through either a printed online statement or receipt, you should not have any problem overturning the error on your report.

Reporting information

The names and contact information of the three bureaus are as follows:

Equifax: P.O. Box 740250, Atlanta, GA 30374- 0241.
Report fraud: Call (888) 766-0008 and write to address above.
TDD: (800) 255-0056
Web: www.equifax.com

Experian: PO Box 9532, Allen, TX, 75013
Report fraud: Call (888) EXPERIAN (888-397-3742) and write to address above.
TDD: Use relay to fraud number above.
Web: www.experian.com/fraud

TransUnion: P.O. Box 6790, Fullerton, CA 92834-6790.
Report fraud: Call (800) 680-7289 and write to address above.
TDD: (877) 553-7803
E-mail (fraud victims only): fvad@transunion.com
Web: www.transunion.com

Good Luck with your credit-building endeavors, and stay tuned to the payday loans money blog for more credit building tips.

New Hampshire’s Banking Commissioner has denied the request of payday loans lenders to charge 365% on open-ended lines of credit.

The South Carolina lender Advance America Cash Advance was fighting the the law that passed 8 day ago in New Hampshire capping annual interest rates on payday loans to 36%.

Peter Hildereth, the banking commissioner, declared the latest request to be unreasonable and predatory.

The request by Advance America was to loan money under a different section of banking law that would allow them to loan out money without being subject to the interest rate caps.

After stating that a consumer who borrowed $500 dollars at 365% interest for a year would end up paying a grand total of $2325 in interest, Peter Hildereth said the following;

“Brought down to its basic level, it just is not fair”

I agree, and I think that anyone would. $2325 dollars in interest on a $500 dollar loan is clearly an injustice when examining the situation at a quick glance. Looking at the situation a little closer, however, reveals an entirely different story proving that the lenders are actually the ones who have been dealt with unjustly.

The Truth Made Clearer

For instance, the 365% interest rate here has been explained using an unrealistic example. First of all, the interest rate here is an annual percentage rate which means that the $2,325 dollars in interest being charged on the $500 dollar loan in the example above, is based on the assumption that the consumer borrowing the loan would have to let the loan loan lapse for an entire year without making and effort to pay anything back. You would be hard pressed to find a consumer who would be so irresponsible as to miss payments 26 times in a row. The standard term for payday loans is two weeks.

Payday loans lenders typically charge up to 521% when it comes to interest rates. That being said, even at the highest percentage of 521%, far above the 365% charged by Cash Advance America, the total interest charged on a loan of $100 dollars for the standard term of two weeks, would cost the consumer only $20 in interest charges.

This is only a 20% interest charge on the money borrowed and a far cry from the ridiculous claims of misinformed payday loan opponents.

Putting things into Perspective

Now that we have revealed the truth in payday loan lending rates, let’s consider the situation from the side of Advance America and other lenders who are suffering from these interest rate caps.

As mentioned above, the caps were enforced at an annual percentage rate of 36%. For lenders this means that on a $100 dollar loan given on a two week term, the total profit made on interest charges for each loan would be $1.38 or just short of a dime a day.

You can now understand Advance America’s request to loan funds under different laws, as these low annual percentage rates will prove devastating to them and other payday loans businesses.

Adding Insult to Injury

It’s shocking that laws such as these are being passed with our economy in such a fragile state. These laws will create additional job losses as lenders will be forced to lay off employees or close stores altogether. For consumers everywhere who are having a hard time making ends meet, payday loans are a saving grace when the need to avoid late payment penalties with creditors or other small financial emergencies arise.

Show Your Support!

For those of you who have used payday loans and have seen their advantages, consider writing your local and state officials showing your support and expressing your concern over the latest trend sweeping the country capping lender’s interest rates.

It’s Should Be The Consumer’s Decision

When it comes to interest rates, consumers like you should decide what is acceptable and what is not through your simple choice to use or not use the services of payday loan lenders.

One thing is for certain, if things don’t change, these sources of of obtaining quick payday loans will cease to exist.

Image by flickr

The payday loan money blog continues Part III on personal credit with obtaining and reviewing your personal credit report. Here’s how.

A quick Internet search will reveal several sites you can use to order your credit report, but if you want the one that I use, it’s www.freeannualcreditreport.com. This site is a reputable source and will allow you to print off all three of your credit reports from each of the three main credit bureaus.

You will be asked some personal questions in regard to previous street addresses or credit accounts that will help them identify you as the person you say you are. Once you get through these preliminaries, you will be able to print off your report for review.

Understanding Your Credit Report

After printing off your credit report, the next objective is to carefully review it for any discrepancies. By discrepancies I mean anything that appears to be incorrect.

You may have misspelling in your name and address or you may have credit accounts listed that don’t belong to you. This could be a result of identity fraud or perhaps just a recording mistake made by someone else’s creditor or the credit bureau themselves.

Reading your credit report can be confusing at first, but after a short examination you ought to be able to make sense of it. Your credit report will be divided in to several sections. Here is some helpful information describing each section you will find on your report.

Section 1: Personal Information

The section on personal information is the easiest part of your credit report to read and contains information such as SSN, Name, Address, etc. Double check the information here for accuracy before moving on.

Section 2: Credit History

The credit history section contains the bulk of the information on your credit report. It lists all the information for your past credit accounts including the date they were opened, closed, account numbers, names of your creditors and if you still owe a creditor, the minimum payments, the total balance left on the account and the current status of the account whether delinquent or in good standing.

If you possess accounts that are not showing on your credit report, it may be because they are relatively new or the account resides with a company that doesn’t run credit checks when applying for their service. This would include companies like payday loans lenders. Some payday loans lenders don’t require credit checks at all, making them a prime source of extra cash for individuals with a bad credit score.

This information is pretty straightforward, but there may be some things you question, so I will list them below for your understanding.

• Internal Collection: The creditor is in the process of trying to collect the debt.
• Charged Off: The creditor tried to collect the debt, couldn’t and threw
  in the towel.
• Numbers prefaced by R or I: You will see a lot of the numbers on your accounts prefaced with the letters R or I. “R” stands for revolving credit accounts where “I” stands for Installment loan accounts. The lower the number that follows, usually between one and nine, the better the payment history on that account.

Section 3. Public Records

If you have anything in the public records section, you have a long road of credit repair ahead of you. This is the section where things like defaults and or bankruptcies are reported and is a big red flag to anyone thinking about extending a line of credit to you.

You will have to be diligent and patient as these things can take a long time to cycle of your credit report. For example, a bankruptcy can take as long as 10 years to cycle off.

Keep in mind, however, that these public records are easier to deal with as they get older, provided you maintain a clean credit history between then and now. Your credit score, however, won’t come to its full potential no matter what you do until they clear off your report altogether.

Section 4. Inquiries

An inquiry is marked on your credit report whenever the creditor you’re applying for financing through checks your personal credit. These inquiries could also be insurance providers as well as employers you applied with and gave consent to run your credit.

The more credit inquiries on your account, the more risky you appear to creditors as they might tend to think you will overextend yourself with two many open accounts and therefore not be able to pay them on time.

The number of inquiries typically doesn’t affect your credit score too much, but as a general rule of thumb you will want to be conscious of how often you are opening or applying for accounts or services that require a credit check.

In Conclusion

Take the time to download and review your credit report and join us again for Part IV of this series on the payday loans money blog.

I hope your report fares well!

Credit Cards - A funny Animal

Welcome back to personalmoneystore.com’s payday loans money blog and Part II of this series on personal credit.

Yesterday, in Part I we touched on personal credit and how credit is scored by the credit bureaus who track our financial account information.

Today we will continue our discussion. I’ll talk first about the common misconception regarding building credit that often gets consumers into trouble. I’ll also cover the first steps we will need to take in obtaining our personal credit score.

Common Misconceptions About Building Credit

Credit is a funny animal, and to some degree it works contrary to what we as consumers would consider sensible.

Naturally, we have a tendency to think that if we have a credit card and we make purchases and pay the balance off in full each month, we would get a higher credit score ranking from the credit bureaus.

However, by paying off the entire balance in full each month, the credit bureaus don’t see you as really borrowing any money at all. But, if you pay off your balance in monthly installments, the credit bureaus see you as having a debt and making good on that debt. Therefore, they award you points toward your credit ranking.

It Costs To Have Good Credit

It’s ironic that the the process of establishing a good credit score is achieved through the irresponsible practice of obtaining debt and paying it off more slowly than what would be considered financially smart.

Nonetheless, don’t let this become a crutch. Some consumers fall into the trap of justifying large credit purchases on behalf of their pursuit to obtain that elusive credit score.

Many other things will be addressed throughout this series that will help you strategically build your credit without falling into financial snares that will leave you entrapped in debt.

Many of our customers borrow payday loans just to avoid the late payment penalties on debts they have accrued by making decisions with good intentions but bad financial planning. Don’t let that be you!

The End of the Road for Bad Credit

It's a Hard Road

At this point you may not even know if you have good credit or bad credit. Surely you have some assumptions. After all, nobody pays your bills but you, so you must ask yourself, “Have I been diligent about making my payments on time?”

If so, I would expect at least a fair credit rating, but really there is only one way to find out: obtaining a copy of your credit report.

Obtaining Your Credit Report

Obtaining your credit report is free the first time you request it each year. Each additional request, however, will cost you a little extra money, but the price is usually quite small and affordable.

You are entitled to one free credit report per year from each of the the three main credit bureaus. The first step to achieving or maintaining good credit is to download all three of your credit reports from each of the three main credit bureaus. One may report things about you or your credit history that may be inaccurate and will need to be addressed as soon as possible.

Once your credit is in good standing, you can download free reports from the bureaus individually. That means you can check your credit score every three months, allowing you to monitor your report for discrepancies without having to pay a dime.

To Be Continued…

That concludes Part II of our series on credit. Keep your eyes open for Part III on the payday loans money blog, where we will show you how to obtain your credit reports and understand them.

Credit repair takes a little time, but considering the effects it has on your financial opportunities, it is time well spent.

See you soon!

Help in hard times

Welcome back to Part II of this series on “Financial Preservation in 2009,” courtesy of personalmoneystore.com’s payday loans money blog. This series will continue addressing how to prevent financial crisis as a result of unemployment in 2009 by preparing now.

Here are a few things you can do to save extra money today while you still have a job, so that you have the necessary emergency funds you need later this year if you find that you don’t.

Are Those Car Payments Really Necessary?

Nobody can blame you for wanting what is hot or the current trend, but when it comes to automobiles, staying with the current trend can cost you a lot of extra money.

When buying a new car, not only does it require high monthly payments but also higher insurance rates and higher taxes and licensing, delivering one whammy after another to your pocketbook, and needing payday loans to cover for it.

Is this really necessary? Downgrading to a newer used vehicle, or even an older model that has been nicely taken care of and properly maintained, will save you both in monthly payments and taxes and licensing.

You may even be able to trade your current vehicle for an older model that the dealer has gotten on a trade-in. This could get you out of payments altogether.

This should be carefully considered if you are concerned with your job’s longevity as it can save you thousands of dollars which, if saved as emergency funds, could preserve you in a time of financial need.

Downgrading Digital Services

Consumers today are gadget-obsessed, having a multitude of gadgets and digital subscriptions that may be cheap by themselves but add up to a considerable sum when considering other digital services in your home.

These digital services include things such as your cell phone, cable television, digital media, satellite radio or any other of the digital packages available today.

Examine each of the packages you have and decide whether they are used enough to justify what you are currently spending. After your evaluation, you will be able to determine whether to downgrade each respective package or terminate it all altogether.

Debt Consolidation And Payment Insurance

When loosing your job, payday loans are not typically an option due to employment requirements, which means the only funds that will be available to you during this time will be the funds from your unemployment office.

These funds alone will likely not be sufficient to pay your bills, leaving you to pick and choose between which bills you are going to pay and which bills you are not.

Defaulting with creditors wreaks havoc on your personal credit rating. You may have to hire one of the many credit repair services or credit repair companies to help you repair your credit in the event that you do so.

Defaults can take several years to cycle off your credit report, so what you do now will save you both time and money later.

Here are two things you can do now to better position yourself with your outstanding debts so that you won’t be forced to default on any of your current creditors down the road provided you still have them.

Payment Insurance

The first thing you can to is purchase payment insurance through your creditors. Payment insurance will pay your monthly minimum payments in the event that a financial crisis befalls you and you are not able to pay yourself.

The cost of payment insurance varies from one creditor to the next but it is usually a very small sum and is calculated based on the current balance of the account. For example it may be $1 for every $100 dollars of your current account balance.

Debt Consolidation

The second thing you can do is consolidate your debts. Preferably, consolidating your debts into your home mortgage would be the best option if you’re in a position to do so.

With the current interest rates on home loans as low as they are, it may be in your best interest to refinance your debts into your home mortgage.

This allows you to spread that debt over a 30-year term, making the payments far more manageable. You end up spending more in the long run, but it’s a nice safety net to keep you from defaulting with your creditors in the event of limited cash flow.

Lastly, don’t forget about the options we provide you here at personalmoneystore.com. If you find yourself in need of quick cash payday loans to avoid the more spendy late payment fees associated with many of your creditors, we can help. Provided you are still employed, that is.

Good luck in 2009!

Building credit is more complicated than most people think. It's not simply a matter of paying your bills on time.

On PersonalMoneyStore.com’s payday loans money blog, we talk about a variety of financial topics and money-saving tips, tricks and strategies that help you stretch each of your hard-earned dollars the furthest.

We care about your financial welfare and want to equip you effectively to prosper financially.

That being said, today we are going to start a series on credit — undeniably the most important and least understood part of consumer financial education.

What is Credit?

Most consumers don’t realize the importance of credit or even what credit is. When most of us hear the term credit we think of all the plastic in our wallet that allows us to charge purchases for later payment.

Often times the term credit brings a mixture of both good and bad feelings because of the opportunity it provides us as well as the difficulties it can bring in light of the debt we as consumers tend to accumulate.

The Objective of this Series on Credit

For the duration of this series, however, we will be talking about credit in the terms of personal credit or credit score, or in other words the scoring index by which creditors judge our “credit worthiness” or ability to handle money effectively and responsibly.

How Credit Works

How credit works is complicated, but to get the ball rolling a little more quickly, let’s just throw out a quick description in layman terms.

Every time a consumer, such as yourself, applies for an account with a creditor — such as a bank, credit card company, retail store, auto loan, personal loan or even a home mortgage — the account is reported to each of the nations three main credit bureaus.

There are many factors which determine a good credit score.

What Creditors Track

The credit bureaus track the number of open accounts, closed accounts, account balances, credit inquiries and any history of late payments or collections that have been reported on your behalf. Through a complex algorithm unique to each of the bureaus, they assign you a numerical score.

The purpose of this credit scoring system is twofold. First, it helps protect creditors from fraudulent or irresponsible customer transactions on financed merchandise such as cars, furniture, appliances and anything else you would choose to finance with a credit card or a company’s in-house financing options.

Their are some exceptions to this rule, such as payday loans lenders. These companies typically don’t work with the credit bureaus, which makes them a good loan option for people with bad credit, but we will talk about that later in this series.

Secondly, and most importantly, credit scoring it set up to award those who are diligent and responsible with their financial resources and penalize those who are not.

The difficulty in obtaining a good credit score these days has become a little more cloudy and involves more than just paying your bills on time. For many this begs the question: Is the effort worth it? Or is having good credit really that important?

How Important Is It To Have Good Credit?

It can be easy to brush off the pursuit of good credit as unimportant, but today good credit has become a very important, integral part of every consumer’s personal and financial success. Your personal credit score has an effect on the following:

• How much you pay for car insurance
• How much you pay for house insurance
• How you pay for your personal health insurance
• How high your interest rate is on your home mortgage loan
• How high your interest rate is on auto or other personal loans
• The total credit amount you’re awarded with financed options or credit loans
• Your chances of employment

Almost every major financial transaction will consider your personal credit rating or credit score before awarding or denying you any contractual terms.

Credit and Employment

As mentioned above, more and more employers are running credit checks to validate the credit worthiness of new hires, as they believe it is the best indicator of a potential employee’s responsibility. Employers associate a good credit score with an employee’s diligence to come to work on time each day and fulfill the requirements of their job position.

The Value of Having Good Credit

You can’t put a price on good credit. Good credit saves you a fortune in unnecessary expenses over time that can be delegated to a retirement savings plan or college fund for the kids. Knowing how credit works and its effect on your financial endeavors will open doors that would otherwise stay shut. Short term credit needs are filled well by payday loans.

That concludes part one of this series on how credit works. Consider your personal credit and its limiting factors in your life and join us again tomorrow for part two.

See you then!

Posted courtesy of personalmoneystore.com, your payday loans source.

In the midst of a financial crisis and a failing economy, payday lenders are fighting to stay alive as local, state, and federal regulators try to cap the interest rates these lenders charge consumers for short term payday loans.
The latest in the line of persecuted payday lenders is South Carolina based Advance America Cash Advance Inc.

Advance America Cash Advance claims that it can’t make enough money under the new laws that are being passed to keeps it’s doors open to it’s consumers, effectively driving them out of business like many other payday lenders across the country.

New Law, Old Tactics.

For payday loans stores in New Hampshire, the law that takes place on Thursday, January 2, 2009, and will cap the percentage rates to 36%.

For consumers, 36% may even seem like a high interest rate but the thing to remember here is that the interest rates are calculated on an annual percentage rate basis, so for a one hundred dollar payday loan, a 36% APR would equate to only about $1.38 in total interest charges on a two week payday loan. This is barely over 1% of the total loan value.

Clearly these tactics are aimed at driving these lenders out of business without having to officially ban them.

Next on the Endangered Species List

What Is Fair?

Typically payday loan lenders charge around $20 per $100 borrowed on a two week term. This amounts to an annual percentage rate of about 521%. The new cap reduces revenue per loan almost 1,900% which would be a heavy blow to any business’s bottom line.

The question as to what APR is fair is up to consumers not regulators. If the rates are to high consumers won’t borrow extra cash utilizing these lending services which will force these businesses to find a profitable balance between revenue and market share.

A New Hope For Survival

To stay alive, Advance Cash America Advance is hoping to loan money under other sections of banking law. This would allow the company to charge their usual annual percentage rates without falling under the current restrictions of the new laws passed against payday loan lenders in New Hampshire.

The Pro and Cons of Payday Loan Lending

The battle for and against payday loans has been a continuing battle and a constant struggle for lenders across the country with many states already implementing bans on payday loans.

Why the animosity towards these lenders? Opponents call them predatory and convince the public around them to believe the same with advertising campaigns that draw attention to the perceived high annual percentage rates of 521 percent but in the process fail to explain what the total interest on the loan would actually equate to.

The uneducated public looks at 521% as having to payback over five times the amount of the borrowed loan. It’s no wonder they get outraged and fall towards the opponents side of the payday loan debate.

The Cost Cost of Payday Loan Regulation

Banning and or putting payday loan lenders out of business is really a shame for many reasons. First off we have people losing their jobs in an economy that cannot afford to continue in that direction. Secondly, payday loans offer a service that is unparalleled by any others within the financial industry.

Hundreds of millions of dollars in these loans are given out out to applicants each year proving both their popularity and their worth. Bad business will eventually crucify itself. The fact that these cash advance centers are still open is a testament to the value of their services.

What Makes Payday Loan Lending Valuable to Consumers

Nowhere else can you go today to apply for extra cash and receive it almost immediately after approval.

You can now apply online for payday loans and have funds deposited directly into your account. These loans usually don’t amount to more than $1500 and require minimal criteria for approval making them ideal for individuals with bad credit or no credit at all. The two most important requirements applicants are required to have is a current employment and a checking account for funds to be deposited into.

For life’s little emergencies that demand extra cash, payday loans are hard to beat. For example, if your car breaks down today, how do you get to work tomorrow? Perhaps your short on funds to pay your monthly bills where a payday loan could help you save money by eliminating lay payment fees. Maybe it’s the high scho0l prom this week and you need to purchase your daughters dress, but your short on funds till your next payday. Emergency funds are needed from time to time and that is what makes payday loan lending a valuable service.

There are hundreds of scenarios that could find you benefiting from the use of payday loan services. Be sure to take the time to educate yourself on the payday loan industry before joining forces with payday loan opponents. After all, you may just find yourself in need of payday loans yourself someday.

Examine your finances to avoid wasteful spending

Welcome back to Part II of the “Frugal Finance” series on the payday loans money blog. If you are just joining us, in the first part of the discussion we covered the process of determining your net worth by subtracting your personal liabilities such as outstanding personal loans and consumer credit card balances from the total value of your assets. Your assets are things you own such as the equitable portion of your home or car, checking and savings accounts, stocks and bonds, or retirement accounts such as a 401k.

Purpose of Establishing a Baseline or “Net Worth”

The purpose of identifying your financial baseline or net worth, if you remember correctly, was to compare your future financial positions with your current financial position.

This will allow you to see if you are making progress in your financial affairs and therefore plan for retirement and other important financial goals in your intermediate or long term future.

The comparison also works as a motivational or inspirational tool to encourage you in your money saving endeavors. Seeing progress will help you to stay the course without getting discouraged.

Where Is Your Money Going?

The next thing that we must determine after finding out your net worth is where your money is currently going. This means that you must record each and every one of your monthly expenditures.

With a pen and paper in hand, start writing down all your known expenses, starting with your monthly bills. Once you have listed all your expenses, categorize your bills into two separate categories called wants and needs.

Be careful in your distinction here as some things may feel like needs but are really just wants. The simple difference you will want to ask yourself when categorizing your expenses between needs and wants is, “Can I live without it?”  If you can live with out it, it would be a want rather than a need.

I have included an example list below to help you determine the difference:

Example Needs

• Monthly mortgage payment or rent
• Heat, gas, electric, water and other utilities
• Car

Example Wants

• Internet
• Cell phones
• Television
• Entertainment such as movies, dinners out etc.

Compromising With Unnecessary Expenses

Looking at the want list above may surprise you as we have all grown very attached to the current generation of technology. Mobile phones, internet, and television are all things we can live without, although it seems hard to believe sometimes.

The intent here is not to cancel all your wants or optional expenses but rather to simply help you to expose those expenses that can provide you an opportunity to save extra money.

The more expenses you can trim down, the more extra cash you can save, allowing you to allocate additional funds towards your consumer debt or to a savings account so that the next time you find yourself needing payday loans, you will have some emergency funds to spare.

If you can’t bare giving up any of your digital services, then consider lowering your monthly package subscriptions to save some extra money each month. For example, if your television package is subscribed to more than just one movie package such as HBO, Starz, TMC, etc., pick a favorite and save on the rest.

Develop A Monthly Budget

So let’s recap. We established a baseline by determining our net worth, listed our expenses and categorized them according to wants and needs, now we need to develop a monthly budget.

A monthly budget will allow us to delegate funds from our total recorded monthly income to each of our needed expenses. The remainder can be allocated between debts and/or your listed wants. A monthly budget will help keep you accountable on a monthly basis to allocating funds to accomplish specific goals.

Join us for part three to learn some helpful tips on creating and maintaining a budget.

Posted courtesy of PersonalMoneyStore.com. Your payday loans source.

Welcome back to the payday loans money blog at personalmoneystore.com.

Continuing on yesterday’s topic in the article, “Increasing Income , Decreasing Debt | Payday Loans Blog Resolutions for 2009,” today we will continue the topic by exposing habits we possess that keep us tied to or continuing the cycle of financial debt.

Where Does The Money Go?

Having trouble seeing where your money is going? Follow this excerice to save money and eliminate debt!

Living In A Financial Fog?

Apart from the larger monthly expenses such as your house and car payments, you may be a little foggy as to what consumes the rest of your income. “Where does the money go?” is a question that is usually indicative of poor budgeting and or spending habits.

Know Where Your Money Is Being Spent

If you don’t know where your moneys is being spent, it is difficult to see the areas where you can save.

For one month, devote yourself to recording each and every one of your daily purchases and expenses. At the end of the month, categorize each into their own respective categories such as food, entertainment, home and utilities, etc. By taking a careful inventory of these monthly expenses, you will begin to see some interesting patterns emerge. These patterns will fall into two separate categories that we will call excessive spending and habitual spending.

Meet Daryl, Your Average American Consumer

For this example we are going to use Daryl, a debt burdened consumer, who has completed the above exercise, so that we can illustrate the patterns that you might expect to see when doing this exercise for yourself.

Daryl is an average American consumer with just more than $9,000 in consumer credit card debt. He has found himself paying only his minimum monthly payments at the end of the month due to a shortage of funds and occasionally he has to borrow payday loans to avoid late payment penalties in on his mortgage payment.

Before the above exercise, Daryl said that he occasionally goes out with his friends but does not buy a lot of consumer goods like his friends do. He considers himself a fairly conservative spender. He just can’t seem to make any headway on his debt. He blames his job, saying that he just doesn’t make enough to live on. So we asked Daryl to do the above exercise to see just how conservative he really is.

Daryl’s Spending Habits

Below are some of the habitual spending habits that Daryl found after completing the above exercise.

• Morning double shot espresso purchases two to three times a week before work at a cost of $4.25 each.
• Lunch twice a week at fast food establishments at a cost of $6.50 each.
• Movie once a week with refreshments costing an average of $16 each.

After doing the math, Daryl found that each month he was spending $51 on “wake up” coffee. $52 on lunch outings and $64 on movies and refreshments, for a grand total of $167.

Daryl did a little better in the excessive spending category finding only the following after completing the above exercise. But it was a big one.

• Groceries bill meeting and exceeding $150 dollars a week

This may not seem to be that much of a grocery bill, but considering that Daryl is “Batching it,” or in other words living solo, a grocery bill of $600 per month for one person is extremely excessive.

So between Daryl’s grocery bill and his habitual spending expenses, Daryl was spending $767 dollars each month.

What Could Daryl Do Better?

The advice given to Daryl after he completed the exercise saved him greatly in his monthly expenses. Here is what was suggested to improve his financial out look.

Cutting Out The Coffee

Instead of getting that morning cup of espresso at the drive-through three times a week, cut back to just one espresso a week. Better yet, eliminating these expensive cups of mud altogether by making his own coffee at home.

If coffee is not an acceptable substitute, purchasing an espresso maker would pay for itself rather quickly with the extra cash saved each week and could be considered a viable option as well.

Pack Out, Don’t Take Out!

Instead of indulging in fast food lunches twice a week, making a lunch and bringing it to work with him would save Daryl the extra money and his cardiac health too.

Spendy...and not good for you.

Subtituting the weekly movie and refreshments, with a RedBox or Netflix movie and some cheaper finger food with the friends, would eliminate his monthly dependence on payday loans.

Buy The Groceries, Not The Store

As far as groceries are concerned, Daryl could substantially lower his costs by going to the store with a planned list of needed food items, thus eliminating a lot of the more expensive junk foods he was getting before. This would lower his monthly grocery bill to the more typical average food bill for one person which should be in the neighborhood of $250 to $300 dollars.

The Conclusion

By subscribing to Netflix ($15), purchasing only one espresso each week ($17) and lowering his food bill to the higher end of the average food bill for one person ($300 dollars), Daryl will have room for beer and refreshments for movie night once a week and save $435 dollars each month.

If Daryl Can Do It, You Can Do

Looking at Daryl’s circumstances and the potential outcome,  a very small sacrifice is made for some extraordinary savings.

This shows the importance of implementing a budget or system to track your expenses each month so you can isolate areas where you can save money and regain financial territory lost to consumer credit debt.

Posted courtesy of Personal Money Store, your payday loans source.