The advertisements make it look so easy – all you need is a job and a checking account and $300 can be deposited into your bank account by tomorrow. The lure of payday loans is tempting for many, especially those living on the edge and barely hanging on financially. Most people know the reasons why payday loans are a bad idea – they are ridiculously expensive, usually charging anywhere from $10 to $30 for each $100 borrowed and most turn into ruthless debt collectors should you happen to fall behind on the payments. Most payday loan companies allow borrowers to “renew” their loan when the payment comes due, but renewing comes with a high cost for the privilidge. If a borrower renews their $100 loan four times at $25 per renewal, that original $100 loan is suddenly $200 and nothing has yet been paid on the prinicipal – the borrower still owes $100 plus the cost of borrowing the cash.
But despite the drawbacks, hundreds of thousands of people take the payday loan bait, parting with money they can not afford to part with. The decision often leads to deeper financial crisis and a debt cycle that tends to include taking on additional loans to pay off the first loan. The best advise on dealing with payday loans is to avoid them all together. In most cases, it’s not necessary. The following ideas can help bring in a few extra dollars to meet short-term cash needs and avoid the payday loan trap.
Sell gold. You’re thinking “if I had gold to sell, I wouldn’t be in this position” right? Well, you might have more then you think. Gold and silver are currently selling at an all-time high and even bits and pieces of broken jewelry – necklaces, bracelets, rings and other items are selling for prices never seen before. The items are eventually melted down, so it doesn’t matter if the gold is in one piece or not. There are many companies that will mail you a pre-addressed envelope in which you place your broken gold jewelry, mail it in and several days later, receive a check for items and many people prefer the anonymity of conducting the transaction by mail. For for those who need to pocket the cash a bit faster, a trip to the local pawn shop might be more convenient. Many do buy gold at competitive prices and the turn-around is much quicker. If you happen to have jewelry in one piece – a ring that no longer fits or a pair of gold earrings you haven’t worn in years – now might be the perfect time to look into selling them. With the price of gold and silver at current levels, it is getting more and more expensive for jewelry makers to purchase metals, creating an upsurge in the used-jewelry market. Pawn shops and used jewelry vendors are great places to start, but if there isn’t one in your area, try posting an advertisement online or in your local newspaper.
Have a yard sale. Most of us have things laying around that we can easily live without and a yard sale is a perfect way to clean out the closets and bring in some extra cash. A yard sale doesn’t need to be fancy, but you should have at least a few signs (handmade signs are just fine) advertising your sale and your items should be displayed in a way that makes it easy for people see what you are offering. It is sometimes surprising what people will buy and as the saying goes “one person’s trash is another person’s treasure.” If you are in doubt as to whether an item should be included in a yard sale, put it out, you might be pleasantly surprised. I once had someone buy a small bag of elastics (that I was going to throw away) from me for $1. If you have excess buttons, fabric, yarn, glass jars – anything, try selling them.
Sell what you can. Of course, if you don’t have a yard or a garage, having a yard sale can be tricky, but there’s always the online versions like Ebay and other auction sites. Old college textbooks, batches of clothing, movies or appliances – an old coffee maker, toaster or hair dryer – you no longer use can often bring cash. Most of these things can also be sold online or by placing an advertisement in the newspaper. Check with your local pawnshop to see what items they routinely buy – you might be surprised.
Craft your way to payday. Web sites like www.etsy.com and others like offer a place for crafters to buy and sell handmade items. Whether you crochet blankets, sew clothes, make soap or string beads, the Internet offers a variety of ways to peddle your wares. Some churches and charitable organizations in your hometown might be willing to help you help yourself too. Most chairitable organizations are so overwhelmed by requests for money these days (due to the economy and so many people seeking help) that they might welcome an industrious person who comes to them and says “I’m trying to avoid debt by selling cookies. Could I sell some in your lobby after church on Sundays?” Some now-famous cookie companies and television cooking personalities got their start selling sandwhiches or baked goods to churches and offices.
Donate plasma or sign on for medical research project. Although these might not be options in some small towns, in many urban areas, there are places that will pay donors usually about $25 for a plasma donation. Most are listed in the phone book or are easy to find on the Internet. Donating plasma is much like donating blood, but it takes a bit longer. Most organizations allow donors to give plasma at least once or twice a week. Volunteering for a medical research project is another option and some pay quite well. In most research projects, volunteers are used to test a variety of new medications or treatments. Some require overnight stays, others simply require a weekly check-in. WWW.clinicalconnection.com is a good place to start.
Reevaluate what you really need. Sounds easy but it’s actually such a tough job that many people avoid it all together. Sit down with your bills in your hand and decide what you can live without and how you can reduce your monthly obligations. Is your cell phone service costing you more than it should? Are you getting the best auto insurance rates? Do you really need all those cable channels? Is there a way you can save money on your electricity bill, perhaps by turning down the air coniditioning or heat? Is there a way you can save money on your monthly food costs, perhaps by cooking more home-prepared meals? It can be hard to look at the way you are living and whiddle expenses down to the minimum, but once you do, you’ll discover that the temptation for a payday loan quickly disappears. And when you do discover ways to save money on your living expenses – even if it’s just $10 a month – be sure to set some of that money aside each week and save it for future emergencies.