Even though you have a payday loan to pay off, you still need to budget your money. Budgeting is a spending plan so you can get your bills paid off, as well as save money for things like vacations. When you hear the word budget, you may think of it as something difficult to set up. A zero based budget, however, is very simple, and you can get started doing it today.
Payday loans have loans in a range of sizes, such as from $100 to $2,000. This depends on the payday loan company, as well as the maximum amount you can borrow for your state. Contact your state department to find this information, or the payday loan company can help you.
The payday loan is also based on how much money you make each week, as the payday loan company will not let you borrow more than what you make to ensure that you can pay it back. The finance charge for these loans is usually very high, but you can get your money much quicker than from a bank or other loan company.
When you set up the loan, you have to write a personal check for the amount of money you are borrowing, including the finance charge, for the company to hold. The company will then give you cash on the spot, or deposit it directly in your bank account. You will have to sign an agreement stating when you will pay off the loan. When it is time to pay the loan, the payday loan company will cash your check. If you cannot pay it off within this time, most payday loan companies will let you get an extension.
Zero Based Budget
Zero based budgeting is starting at zero at the start for each time period. For example, if you are doing a yearly budget, you will always start out at zero in January. Any money left over at the end of the week, month, quarter, or year, can be put towards debt, a savings account, etc.
Remember that payday loans have to be paid off by your next paycheck, which could be a week or a month so base your budget on this until it is paid off.
Decide if you want to set up a weekly, monthly, etc., budget, and then write down how much money you make during that period. Base that on what you make from your employer, child support payments, or any other money you have coming in. If you are a freelancer, write down an estimated number of what you think you will make.
Write down categories on the spreadsheet, such as a category for your house payment, utility bills, payday loans, credit cards, etc.
Add up all of your expenses making sure you include every dollar you know you will have to spend, such as your utility payments, house, etc., as well as adding an approximate total amount for personal expenses, like entertainment, clothing, etc. Divide the total expenses with the time period you chose to see how much money you have coming in.
When you have all this information, you need to assign every dollar you make to each category, making sure it is enough to make the needed payment, such as your payday loan payment or house payment.
If you cannot pay off your payday loan within the time period that is set, make sure you go to the establishment and get a renewal to give you more time to pay it. Most payday loan companies like Payday Express will work with you so you do not hurt your credit score.