A: A Good Budget is the Key.

Properly managing your payday loan is a skill that could end up saving you from the stress of worrying about your loan payments in the future. The key to properly managing your loan, and your money, is to formulate a budget and stick to it as best you can.

According to dictionary.com, a budget is “an estimate, often itemized, of expected income and expense for a given period in the future”. Budgets allow you to look into the future of your spending, as well as giving you a picture of where you have spent your money in the past. A well put together and detailed budget acts like a roadmap to guide you in your spending and will help you create and reach your financial goals.

The first step in creating a budget is to sit down and figure out your fixed expenses. Fixed expenses are any bills that you pay monthly and tend to be the same, like your rent or your utility bills. Then figure your monthly income. Once you have these figures, you can determine how much of your income is not already dedicated to fixed living expenses. With this “extra” money you can allot certain amounts to things like groceries, entertainment expenses, and possibly a contribution to an emergency fund.

Your payday loan payments should come out of the “extra” money you have at the end of each month. You may need to cut back spending on some of the non-essentials in your budget, like forgoing your entertainment spending for the month. With the right budget, you will be able to pay your loan back in full on the term date. If you find that you just will not be able to pay your loan in full, budget so that you can pay it back in the fewest number of payments. Paying your loan off quickly will save you money in interest charges and your budget will save you time worrying about how you will make your next payment.