Avoid the Debt Cycle

by Jim Hughes   May 8, 2015
debt cycleAccidents, emergencies, and other unforeseen circumstances can lead to financial stress.  If you find yourself struggling financially, borrowing money might be a good short term solution.    However for long term financial issues, a short term loan is only a quick fix, like a bandage for a broken arm. If you find yourself trapped in the cycle of debt, there are a few ways to get out.  Below are some helpful strategies to help you avoid this debt cycle:
  • Seek financial counseling from a professional financial counselor or even a friend or family member who knows how to handle their finances. Don’t expect short term financial help, but instead learn from them how you can change your financial situation.
  • When you get paid, spend your money on necessities first - rent, utilities, food, etc. Don’t buy a new pair of shoes just because you want them.
  • Pay off existing debts before taking on additional debts. If you have an existing short term loan, pay it off before getting another.
  • Don’t borrow money to pay existing debts. If you have an outstanding cash advance or are carrying credit card debt, it is unwise to borrow more money.
  • Don’t make a habit out of taking out loans, but try to avoid debt. Borrowing money should be the exception, not the rule.
  • If you are currently in debt, try to negotiate a monthly payment plan before taking out a loan.
  • Open up a savings account and add money to it every time you get paid, even if you only deposit $10 each month. If your money is in the bank, it makes it harder to spend.
  • Set financial goals and make plans to achieve them. This could include learning how to make and follow a budget.
Jim Hughes   OpenCashAdvance Marketing Manager
Personal Finance
Jim Hughes remembers checking his first email on the original BlackBerry 850 nearly 20 years ago. It was spam, and he fell for it. Even so, he’s been on the beat every day since, following the ebbs and flows of financial technology. Look to Jim for insider exclusives on shorter-duration loans, installment loans, and other popular products in fintech today.