It’s all too easy to fall into debt in today’s economy, but there are strategies you can employ to avoid such an ignominious fate.

It’s all over the news today: consumers are feeling the squeeze when it comes to their wallets, and many Brits have had to resort to taking out payday loans from robber barons such as QuickQuid and Wonga just to make ends meet. It’s a vicious cycle, as taking out one payday advance can often lead to having to take out another and yet another, just to pay the previous ones off, but if you avoid payday lenders like the plague there are ways to actually grow your money so that you have a bit of a cushion in the event of a financial emergency.

TRADITIONAL LENDERS ARE USELESS

It only takes a cursory look at the latest interest rates on savings products offered by high street lenders to know that you can rule out traditional banks and building societies almost completely. In fact, in many cases you might be better off just stuffing your mattress with your cash, considering how the majority of today’s ‘high interest rate’ savers can’t even match the rate of inflation, meaning your money is worth less than it was when you deposited it originally.

However, there are other alternatives to low-yield savings accounts that you may want to consider using. One such source is by making use of a peer-to-peer lender, which will offer much better rates of return to you than anywhere else you could possibly find elsewhere, and these peer-to-peer lending institutions are becoming quite popular as an alternative to savings accounts.

ROLL UP YOUR SLEEVES

Just because you do find a good place to deposit your cash that will lead to real returns, you shouldn’t stop there – in fact, you need to roll up your sleeves and commit to some hard work in order to meet your goals of having spare cash to use in the event of an emergency instead of having to rely upon high interest rate short term loans. It may be old-fashioned, but you may want to consider adopting the old piggy bank approach.

This goes further than stuffing a few spare pennies in a big pink pig every now and again but involves changing your entire outlook to actively seeking out ways to save money in everything you do. If you do your level best to never pay more than you have to for goods and services by shopping around for the best possible deal, and then taking that savings and putting it away for a rainy day, you’ll have an emergency cushion ready and waiting for anything you might encounter along the way.

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Image: Cash by BlatantWorld