Think about ways you might be able to obtain something you want at a lower cost or even for free. For example, you might be able to see a play or hear a concert by volunteering to usher. Or you might get some friends together in order to qualify for a volume or group discount.
Avoid high-cost, short-term loans on your paycheck (payday loans), car title (car title loans), or income tax refunds. These loans typically have high interest rates and fees. Some payday loans may have automatic rollovers, which increases their costs and disguises the fact you are paying more interest on these loans over time.
Two strategies can help you avoid these services. First, put a portion of every paycheck into a savings account by using direct deposit or automatic transfer. If you consistently build savings over time, you will have a ready resource for unexpected expenses. Second, talk to your banker about short-term loan or line of credit options that may offer lower-cost alternatives to payday and car title loans.
Note: Not sure where your money’s going? It’s easy to keep track of your spending: keep your receipts and review your monthly statements. Check them both against your spending plan. Also you can ask your financial institution if they offer online tools to help you track expenses.
Learn more about creating a spending plan
in this topic.
For more information about buying on credit, see the topic All About Credit