Impulse Buying

We had a friend who took out two payday loans to buy a swimming pool. Now let’s get real. We understand that it was hot that day. We also understand that she has three fussy kids. And we get it. A swimming pool is a hell of a lot of fun in the summer time.

But two payday loans? Come on, who does that? Unfortunately, more people than you think. Right now, you’re either patting yourself on the back for being someone who doesn’t buy things on that kind of an impulse, or you’re saying,” Oh my God, I’m the kind of person who would do something like that.” Or, worse, “Oh my God, I’m the kind of person who has done something like that.”

Now we don’t know if our neighbor will be able to pay those loans off on her next payday. Since payday loans are typically 80% of your paycheck before the exorbitant interest, we’re guessing probably not. At the very least, she probably won’t be able to pay both of them back.

The kids are out back on the other side of the fence having a grand old time in the pool. We might even go over and join them. Hey, just because she’s willing to borrow herself into oblivion just to cool down is no reason to stay out of the pool. But seriously, we’re hoping we can have a real talk with her about this sometime, because it’s going to end up running her family’s finances into the ground.

Payday loans have their place. If you have poor credit, and you find yourself in an emergency, by all means, take one out if you need to. There are times, albeit rarely, when not taking out the loan can cost you more than taking it out. An example is if you need to pay for car repairs and don’t have another way to get into work. Losing hours or, worse, your job may be worse than having to pay back the loan and its interest.

Just don’t get in the habit of taking out payday loans, and especially not for impulse buying. There really isn’t anything that you need that badly that it’s worth giving up your whole paycheck for. Ask yourself before you take out a payday loan, “Is this something that really can’t wait a few days or a week until payday?” And if that isn’t enough to curb impulse buying for you, bring a trusted friend into the mix and ask them to help you decide whether something is worth taking out a payday loan for or if you should wait for it.…

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Fun Things to do with a Payday Loan

In most cases, payday loans should be reserved for times when you really desperately need the money for an emergency and have no other way to get it. However, as long as you don’t get out of control, taking out a small cash advance for something fun won’t kill you.

Of course, you shouldn’t borrow more than you’re going to be able to pay back (with interest) without putting yourself in a difficult spot for the next week. But, there are times when something you want or need to do just hits you a few days before payday, and taking out small payday loans won’t affect your ability to pay your other bills.

Payday loan companies are generally willing to lend you up to 80% of your average paycheck. But that doesn’t mean you have to borrow that much from them. When you do borrow, only take what you need. That way, you won’t find yourself in the sad situation of having to turn over 90% of your paycheck when you’re paying them back.

Here are some examples of fun things you might decide to do using a payday loan:

  • Taking the kids on a trip during your day off. Let’s face it, for most of us, our days off and the days when we have money don’t always hit at the same time. Using a payday loan to cover the cost is OK as long as you don’t go overboard. Families need time to have fun together.
  • Christmas or birthday shopping. Nobody should have to go without a present to open on their birthday or Christmas, especially your kids. If you need to take out a small payday loan to get them something, do it. Now, that doesn’t mean they need to get the most expensive toy on their wish list, but you can get them something nice without borrowing against your whole paycheck.
  • Shopping trip. Much like the vacation, there are times when you get a chance to hang out with your friends, and they may not always coincide with times when you have money to spend. Taking out a small loan to have a good time shopping, eating out, or just hanging with your friends won’t sink you as long as you don’t take out more than you can pay back when you get your check.
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