The Cash Advance Addiction - How to Avoid it and Plan for a Secure Financial Future

Cash advances are viable short term financial solutions for urgent issues that cannot wait until your next pay date. When used responsibly, cash advances can come in very handy. However, there are certain cash advance companies that actually prey on the temptation of spending money before you've even received it. This is the complete opposite of good financial planning.

Many people find themselves in legitimate need of a cash advance, and then through poor planning find that they are short on funds for repayment when payday rolls around. They then decide to take out a second advance to cover the first. This is the beginning of the cash advance addiction. For many people, this turns into managing biweekly loan fees for the excessive number of payday loans they wind up juggling.

The general rule for your finances should be to earn money, put a small percentage in savings, and then spend. In today's economy this can be a difficult rule to follow, but it is the only way to avoid the cash advance addiction.

1. Know Your Finances and Make a Budget - This is the hardest part for some people. You need to put all your bills in front of you and lay out a monthly budget. Unnecessary expenses need to be cut back whenever possible. Don't forget to include daily expenses into your budget, like groceries and gas. If possible, leave a small amount as a cushion for an unexpected event. Ideally, that "small amount" can then go into a savings account.


2. Set Goals - Goals are always a great incentive for everyday life as well during your financial planning. You can start by clarifying your ultimate goal and then work backwards into smaller, tangible goals. Your ultimate goal may be to have $250,000 saved by the time you retire. A smaller tangible goal might be to lower the number of extra minutes you pay for on your cell phone or only go out to eat once a week instead of twice. Set that little extra in savings.


3. Save, Save, Save - Every little bit counts. You can start by saving $5 a week in a coffee can if you need to. Throw all your change into a jar and at the end of the month you'll have extra money to add to your savings.


4. Open a High Yield Savings Account - Once you have saved at least $100 find a bank offering a high yield savings account. Many banks now offer you 3.0% interest or higher. Keeping your long term goal in mind, you can always use your "emergency fund" if necessary, which will eliminate the need for getting a cash advance.


5. Avoid Taking Out Multiple Cash Advances -If you find yourself in a situation when you simply can't avoid taking out a cash advance, plan and budget for the repayment on your next pay date. Do not take out second and third payday loans with the reasoning that other things came up. Trying to manage multiple cash advances will become very difficult faster than you think.

If you follow the steps laid out above you'll be on your way to a more secure financial future. Your savings account will be there earning you money until you run into emergency circumstances. Taking out an occasional cash advance may arise, but you will need to be disciplined and promptly take care of the repayment. Then you can then rebuild your savings and get back on track.