A payday loan is money lent to an individual at a high rate of interest on the basis that it will be repaid when the borrower receives their next salary or wages.

How do payday loans affect one’s financial future?

Payday loans are in reality a ‘theft’ loan simply because you are borrowing against your future.  You’re stealing money from yourself, and stealing away your future happiness.

How can consumers avoid payday loans?

Live within your means and make sure you have some money set aside for emergencies.  This will drastically reduce your risks of falling into the hands of payday loans.  

What are some of the common reasons budgets don’t work and how can you get your budget back on track?

  •  You haven’t given your budget enough time. Your budget might not work during the first one to three months as you get it adjusted to your actual income and expenses and as you adjust to living according to your budget.

Solution:  Keep working on it and don't be afraid to adjust the numbers up and down, as you need to.

  • You're Not Adjusting It.  Remember, a budget is not a legal contract that you can never change.

Solution: You should adjust your budget from time to time especially in the beginning. If your income or expenses change, make sure your budget reflects the changes. Major life changes like a marriage, divorce, or birth, also require a budget adjustment. 

  • You forget some expenses:  If you don't include every expense in your budget, it’ll seem like you’re earning more money than you actually do.

Solution: Use your ATM withdrawal receipts and receipts of everything you buy to capture all your expenses.

 

  • Your expenses could be higher than your income: If your net income (income minus expenses) is a negative balance, then you're spending more money than you make. The problem isn't the budget; it's your spending.

Solution: Review each spending category and figure out which ones you can cut back on.  This can be a very difficult exercise if you are overspending in areas that make you feel comfortable.  But it has to be done.

 

  • You aren’t practicing self-discipline:  Sticking to your budget will require you to say "no" to some unplanned purchases. You may even have to cancel a purchase just long enough to check your budget to see if you can afford it. Try delaying some stuff you want to buy.  You may find you no longer want those things after a few months

 What are safer borrowing options one can use when in need of extra cash?

·      Use your old stuff to pawn them for cash

·      Side hustle that can pay you same day

·      Sell old phone/or clothes you still love to get more cash

·      Borrow money from a stokvel

·      Raise a loan against your investment policy/pension fund but you must pay it back quickly