Have you ever had to compromise your financial goals and objectives in order to deal with an emergency? Financiers are always talking about what is right and wrong when it comes to managing money, but what happens when their advice makes no sense to your situation? Don't use retirement money, don't get trapped in credit card debt and don't ever use online direct payday loan lenders to make ends meet are warnings that are often rejected.
You may never think you would ever do any of the above until your finances fall into a spot that calls for drastic measures. It is nice to think that we all could possibly have a wealthy family member or close family friend to bail us out of this and that. It would also be nice if everybody started saving as soon as they got their first job. But alas, a typical household has to depend on their income to support the budget and mistakes of the past as well as the never ending supply of unexpected costs which keeps money out of the savings account.
Maybe you have dipped into your retirement account to help your finances. It would be great if it the money is returned soon after, but most people would not be able to save up enough put it back. This cash does not come overnight and it carries with it some tax liabilities. It must be claimed as income and if it puts you into a higher tax bracket; your money problems are not over.
"I'll just charge it" is a popular option. Just look at the staggering credit card debt numbers for households in this country and many others as well. These plastic cards are accepted all over and in some cases is the only option. Cash cannot even be used in as many places. The problem with this debt is how it gets managed. The minimum payments are appreciated and make the debt affordable but it also does very little in getting rid of it. The revolving accounts also allow people to continue to use the money over and over oftentimes maxing the card out to make the minimum payment more than the user had originally budgeted for. If there was only one credit card per household then the debt wouldn't be so bad, but in fact, multiple cards are often filled creating a strain on any attempts to pay for extras, emergencies or put money into the savings account.
Without a savings account and filled credit cards, payday direct lenders tend to be the first stop for quick emergency cash. These short-term loans are used more often than car title loans or pawn shops because they are not secured to any personal property. If for some reason the loan payoff runs into trouble, the borrower will only pay a bit more in fees rather than losing ownership of the secured collateral. Many borrowers will get the loans paid off in less than 5 months and move forward trying to find a way to prevent the need for one again. These loans work best for emergency purposes rather than relying on them for any type of uncomfortable money situation. It's hard to find other ways to get bills paid, but for someone who is already leaning on alternative online direct lender money options, something has to give.
Emergencies happen every now and then. If your budget is an emergency situation every month then you really have to stop using money outside of your income and make your expenses fit inside it. If it means finding a new job or getting a second job, then give it a try. If you have to downsize your home, apartment or car to lower your expenses then take the plunge and cut back. If you just have to rework your budget and cut down on tall the little expenses throughout the month in order to plug up the everyday money leaks, focus on getting everyone in the house involved.
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