I’ve just finished reading a book called ‘The Richest Man In Babylon’ by George Clason. It’s an awesome read if you want to learn more about keeping hold of your money and making it work for you. A subject which as you know i’m extremely passionate about!
The book gave me the inspiration to record this latest video – Avoiding Payday Loans – as the UK wouldn’t be in the financial mess it is now had previous Governments applied George Clason’s principles.
But lets not go there shall we?
Anyway, inside this video I reveal one simple way to change the way you think about your income and expenses. This is something that I have personally been using for years to great effect. I also cover off the best way to get a grip of your monthly outgoings and discuss three core areas to focus your attention on, if you really do want to avoid the need to borrow money before payday.
You may or may not agree with what I’ve got to say but please DO let me know what you think by sharing your feedback below.
Transcript of this video: Avoiding Payday Loans
Hiya, my name is Martin Smith, and welcome to the Payday Loans Information Centre.
This is the 5th in a series of videos that I’ve recorded for this website and I’m embarrassed to say that it reveals one of my biggest past failures
The good news is that I’m going to give you in inside scoop on how to PROPERLY manage your money without all the usual bullshit financial advice you see online nowadays.
Anyway, the bottom line is this, if you ARE considering taking out a payday loan you NEED TO WATCH this video….now. It’s gonna last around 3 minutes and will reveal what I see it as THE most important things you need to do avoid getting a payday loan to tied you over until the end of the month.
First things first though, if you still don’t know why everyone’s making such a big deal of these payday loans, click back to the homepage and have a look at the welcome video for a candid overview of what they are, how they work, and why you should use them as sparingly as possible.
OK, the title of this video is about avoiding payday loans. But you can probably turn that on it’s head and say that it’s more about NOT running out of money, or better still, learning how to make your money go further.
And no matter how complicated some people try to make the subject of personal finance, when all nonsense and crappy advice has been stripped away, it really comes down to this.
How much money is actually coming IN each month?
And, more importantly, how much money is going out? I’m talking about EVERY SINGLE minuet expense that you have, not just the headline things such as car, electricity, mortgage and so on. But more about this later.
For the purpose of this video, I am going to focus on the regular OUTGOINGS and assume that your monthly INCOME will pretty much stay the same throughout the year, and even if it doesn’t, the stuff I’m going to talk about is still extremely important.
With that being said, regardless of whether you’ve got a permanent job, a temporary job, or if you’re unemployed and receiving benefits, if there IS a way that you can increase the amount of money coming IN each month, even if it’s just by a small amount, then get on the case right now, because it’ll make the next bit much easier.
OK, so turning to your costs, or outgoings, let’s begin.
First things first, I want you to get your head around something that is pretty crucial to the way you manage your money. This is something I’ve been doing for years and it works a treat for me.
From now on, whatever you think is coming IN each month in terms of a salary or benefits, assume that it’s going to be 20% lower than what it actually is. Likewise, and more importantly, I want you to EXPECT that your expenses will be 20% HIGHER than what you have calculated them to be.
It’s quite easy to drive yourself nuts when you start monitoring your money but this simple concept REALLY should be engraved in your mind, particularly at the start of the month when it’s so easy to assume that you’ve got plenty of cash to last until payday.
The next bit is really straightforward, but it will take a bit time to sort out if you DO want to get a grip of what you’re spending. And it doesn’t matter what fancy pants software you use to go about tracking your expenses, the key is to ensure that 1. You’re honest about what’s going out each month, and 2. You include EVERYTHING.
I don’t care if you spend 60p on a cheap little mobile phone app or buy a packet of polos at the corner shop. Record it, record EVERYTHING, because if you don’t, you’re just wasting your time and frankly, I can’t help you.
The quickest way to get started with this stuff is to ask your bank and credit card company for your last 12 months of statements. Better still, get yourself online and download them yourself. This should be your VERY first priority, and once you have this information, the rest is plain sailing.
A word of warning though, DON’T be tempted to use just one month in isolation because that’s NOT going to give you what you need. I deliberately suggested that you use 12 months because that’s gonna include all those expensive periods such as Christmas, summer holidays, birthdays, new stuff for the home, whatever.
So, now that you have your list of expenses, set aside at least an hour and start grouping each expense item into categories, remembering to record the date and value for each expense. When you’re done, you should have a bloody good idea about the state of your finances, how much you’ve been spending, and exactly what you’ve been spending it on.
IF the result of this exercise shows you that you’re living beyond your means, or to put that another way, your expenses are consistently higher than your income, NOW is the time to take a long hard look at those things you’re spending your money on and start cutting back.
Now I don’t have magic powers so I can’t see how your own finances are shaping up, but what I will say is that based on my own personal experience, if you ARE watching this video and trying to figure out how to avoid payday loans and forever get them out of your life, I would suggest focusing on 3 core area of your spending.
1. (One). Cash Leakages
What I’m talking about here is the stuff you buy with paper money, which is not gonna get picked up on any of your bank or credit card statements. Look carefully at the number of times you are withdrawing cash as anything more than once a week suggests that it’s evaporating fast, so you need to get a handle on exactly where it’s going.
2. (Two). Luxuries That You Think Are Necessities
This is a common one and certainly something I’ve been extremely guilty of in the past. I know this is hard and I totally get the fact that there’s a lot of emotions involved when you buy certain products or services, especially if it’s you’re only vice or it’s something for the kids or family members.
But if these things aren’t the absolute essentials you need to survive then get rid of them OR at the very least try and cut them down so you only have one luxury monthly expense, then perhaps rotate how you choose to allocate this each month.
3. (Three). Spending Creep
This is evil, and unless you’re totally committed and disciplined with the way you spend your money, not just when you first start this but 12 months down the line, it could really have a massive bearing on whether you break free from a reliance on payday loans or not.
When I say spending creep, I’m talking about the very so slight increases in your monthly OUTGOINGS over time.
It may start off with the odd £20 here or £50 there but if you’re not careful all of those best intentions when you first decided to get a hold on your finances could count for nothing if you all of a sudden wake up one day needing to once again borrow money to tied you over until payday.
Ok, so that’s my short and sweet summary of how to avoid payday loans. I know that everyone’s situation is different and I’m not trying create a one-sized fits all solution here but DO think that it’s absolutely crucial to ring fence what money you do have at the start of every month and guard it with your life, making sure that what you DO spend that money on is essential, fully tracked and not liable to continually increase and then spiral out of control.
Remember there’s more videos like this, as well as a big stock now of advice, features and news throughout the rest of my website.
I’m Martin Smith, thanks again for taking the time to watch this video and i’ll talk to you very soon.