money0205

Top 10 Reasons People Over Spend
by Debra Vaughn

There are as many reasons that people over spend as there are budgets to help people get out of the debt over spending has caused. By talking to people, conducting surveys and helping people throughout the years, I have made a list of the ten reasons I hear the most often. Take a look to see if you fall in line with any one or more of these causes to indulge.

10. Keeping up an image
Many people feel like if the fall below a certain image that the neighbors set, the neighborhood will think less of them. This is known as keeping up with the Jones'. The truth behind this is that the neighbors are thinking and feeling the same way.

9. Avoidance
I cannot tell you how many people in all financial situation have told me that when they spend to much money for lunch out with friends, shopping with the girls, etc it is to not have to admit to them that they cannot afford to pay the bill for the whole table. If your friends drop you because you cannot afford to buy them lunch, are they really friends?

8. The money is on it's way
I have heard over and over "I thought the check was in the mail." They people who tell me this are telling the truth! The check was in the mail, either late or far less than was expected. When they heard they were getting money, they spent it before they had money in hand.

7. Credit doesn't feel the same
Let's face it, plastic simply does not feel the same as good old fashioned paper cash. For this reason people use credit more often and tend to over spend much more than they would if they had used cash instead.

6. Immediate gratification
When you can go into a store, see something you think you need NOW, then get credit in 5 minutes or less, you get this sense of accomplishment. After all, you get what you want now, and think of how you are actually going to pay for it later, when the bill arrives.

5. Lifestyle maintenance
After a person has lived a certain way for a while and suddenly they find themselve in a bad place financially, it is hard to give it up. The lifestyle they have become accustomed to, they feel, must be maintained, even if it means more debt followed by bankruptcy.

4. Poor as a child
Frued would love this one! Many people who are poor as a child feel the need to spend everything they can get thier hands on as soon as they can. Perhaps there is a fear of someone taking the money away if it is not spent right away. These people must realize that once it is yours, that is it, it is yours.

3. Sense of power
Spending money actually makes many people feel more powerful. Whether it is handing over a wad of cash or pulling out a gold card to charge money, the simple act of spending a large amount of money gives them a rush of false power.

2. Prove self worth
Spending $40 on a haircut, $120 on a designer dress, $30 on a new pair of shoes and maybe $75 on a facial every other week sounds outragous to most people. However, for many people, it makes them feel like they are someone. It makes them feel like they are worth something to the world.

1. Just can't say NO!
This one is the one that I have heard the absolute most. Whether a child asking a parent for the newest fad toy or a spouse wanting the newest computer game, some people just cannot say no! Even if they cannot afford to say yes, they feel like a failure to some degree if the money is not there to meet the wants of the other person. No matter what, these people will make it happen, even if it becomes a dead end to bankruptcy court.

About the Author
Debra Vaughn is a stay-at-home mother to 3 young girls. She is a freelance writer in her spare time. Debra Vaughn also edits and publishes The Family Budgeteer Bi-Weekly Online, includinga FREE E- book and Newsletter which can be found at
http://www.familybudgeteer.com/

Cash Advance Loans: Loan Sharks In Disguise?
by David Berky

You have seen them on the corner and in the poorer parts of town with names like "Quick Cash", "Quick Loan", "Payday Loans", "Car Title Loans". They are starting to sprout up all over the country and will soon rival Starbucks for sheer number of locations.

They are the new trend in predatory lending practices but still manage to fly under the radar of regulation in most states. They don' t charge interest, they charge a "fee".

But it sounds like the ultimate in convenience. Need some quick cash - stop by and in just five minutes you can be out the door with $100, $500 even $1000 dollars. But what is the true cost of this "convenience"?

How It Works
A cash advance or payday/paycheck loan is usually secured by a personal check. Some companies want your bank account or credit card information in addition to or instead of a check.

You write a check to be cashed or agree to have an amount withdrawn from your bank account sometime in the future; usually 14 days (the standard payroll period).

After completing the agreement/contract you are given an amount that is less than what you have agreed to pay. The difference is the "fee" for the loan service. And you have got your cash!

Why It Works
Why is the company willing to loan you money like this? Simple, because loaning out money for these "fees" really amounts to a huge profit at your expense.

For example, say you borrow $200 and the lender charges a "fee" $15 for each $100. Within 14 days you will have to pay $230 for borrowing $200. Now if the $200 keeps you from having to pay a $100 late fee or penalty on something it is probably worth it. But if you just want the money today, you are paying a high price.

You are paying 15% interest for a 14 day loan. That amounts to 3785% compounded interest yearly! No wonder lenders are happy to loan you this money. If they loan you $100 and you pay them back with an extra $15 in two weeks and they loan out the $100 again along with the $15 extra you paid, and they keep doing this for one year, they will turn their $100 into $3785 by the end of the year!

Maybe you should be loaning your money to them rather than borrowing from them.

What To Watch Out For
    * Early repayment fees. Pay off your loan early and they sock you with another fee.
    * Late repayment fees. You may have to pay the entire fee again if you miss the payment date.
    * "Membership" fees. Some companies charge you to become their customer along with charging you as their customer.
    * Giving lenders access to directly debit your bank account. Just hand them your wallet, it's quicker.
    * Fine print (as in all contracts). Know what you are signing or don't sign it.
    * Bounced check or debit fees. Make sure you have money in your bank account or you get to pay your bank a fee as well.
    * "Collateral" requirements such as a car title. Miss your payment and you may be missing your car - permanently.

There Is A Better Way
The root problem here could be that you are getting strangled by your debt payments. Credit cards, store accounts, installment payments and such can eat up your income quickly. Ite may be time to visit a non-profit credit counseling service or create a debt reduction plan for yourself.

Or it could be that you are just spending more than you make. You may need to spend a few minutes each week and write down your expenses. Then categorize and total them to see where your money is going. Then record your income for the same time period and make sure that you are not spending more than you make.

Sure, everyone gets behind occasionally. But you need enough room in your budget (this means spending less than what you make) to accommodate the "budget busters" and surprise expenses that may come up. It may mean cutting back on cable, magazine subscriptions or eating out. But last time I checked, McDonalds did not charge a $15 "fee" for making your food.

About the Author
© Simple Joe, Inc.
David Berky is president of Simple Joe, Inc. which sells the Simple Joe's Debt Eraser PC software. Debt Eraser can help anyone get out of debt quickly and inexpensively by creating a Rapid Debt Reduction Plan. This article may be freely distributed as long as the copyright, author's information and an active link (where possible) are included.