Top 5 tips to prepare for financial stress

Top 5 tips to prepare for financial stress

New research reveals that the number of women using payday loans has been increasing[1] and women are also more likely to use payday loans from a younger age than men.

These loans may offer a quick fix to unexpected expenses such as back-to-school costs or car repairs, yet for many people, they’re often left feeling trapped in a vicious cycle of debt.

Here are our five top tips to help women become more prepared for financial shocks and be informed about their options for accessing cash quickly.

  1. Map out the year ahead….

Get a calendar, sit down and map out the year ahead. Events like a friend’s wedding or your child’s birthday are expensive and are often forgotten about until they’re upon us. Start planning now and put away a small amount of money each pay check so that when the date comes along, you have a stash of cash at your disposal.

  1. …And look to previous years

Wondering where all your money has gone? Sit down with your last year of statements and highlight the large payments to identify big expenses that could repeat themselves. Items such as car registrations or the kid’s school uniforms are large costs that seem to pop up unexpectedly, however if we look back, these are annual expenses that we just forget to account for.

  1. Review your regular costs

From essentials like internet and power to phone plans and yoga classes, we often look for the best deal at the beginning and then continue paying the same amount without giving it a second thought. It’s worth doing a review of your ongoing expenses and seeing if your provider, or another provider, would be able to offer you a better deal. Most companies want to maintain customer loyalty, so will often put you on a cheaper deal if you ask.

  1. Separate your money into multiple accounts

Keeping track of your finances is easier if you split up your money. Head to your bank and ask to open some new accounts – just make sure there’s no transfer fees. Having separate accounts for bills, groceries, entertainment and savings will help you allocate how much you’d like to spend on each of these items and will give you greater control over your spending.

  1. Understand what your credit options are

Many people turn to payday loans as a last-resort for unexpected expenses, but it’s important to remember that these types of loans have extremely high interest rates and will often leave you in a worse off position. Organisations such as Good Shepherd Microfinance offer many finance and credit options for people with low to moderate incomes – and have recently launched Speckle loans as a better alternative for people seeking cash loans under $2,000.

 

[1]    2018, Digital Finance Analytics, ‘Women and Pay Day Lending – An Update 2018, page 2

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