Responsible spending with your wage advance

Have you ever noticed that however much time you have, it is never enough for all the jobs and commitments to be fitted in. It's pretty much the same with money: not enough to go around. There is always that pair of school shoes that has been outgrown overnight or that last minute wedding invitation to splash out on. The difference is, with time shortfalls there is very little we can do about our problem. With cash shortfalls on the other hand there are plenty of options. One of the most popular of these throughout the current recession has been the wage advance.

Most employers pay us for our time and effort at the end of the current pay period, say the end of the working week. If you are lucky you might be paid three quarters of the way through the pay period. But bills and unexpected cash emergencies come in from the first day of each working period regardless as to whether we have been paid or not. Quite simply we are often expected to pay in advance and receive payment in arrears. So it is no wonder that we are constantly playing catch up with our finances. And this is why the wage advance is so appealing to so many of us. We can use it to bring forward what we are owed for what we currently have to pay out. Quite logical and quite simple to operate. But if this is the case why is the wage advance receiving bad press? How can equalling out credit-in with credit-out be a problem?

The answer lies partly with the current recession. Any form of credit, be it a bank loan or wage advance, is under intense scrutiny as the credit squeeze continues. The other principal reason is that some individuals manage to get themselves into a financial mess with their wage advance. And it is all too easy to do this.

Having money in advance of payday, however, remains a good thing for most people. Provided they act responsibly with the cash. For starters, budget: be clear as to the reason you need the advance and make sure you do not spend it on anything else. Basically try to always live within your means and not be swayed into 'keeping up with the Jones'. Secondly, be strict with yourself: there are always means to get more quick cash but only ever utilise one of these per pay period. You simply cannot afford more. Finally, if you have fallen into debt that you are struggling to repay consider consolidating your debt into one lump sum and negotiating a simple repayment schedule. In other words, keep it simple. This usually helps people to not only manage their debt but reduce it in the long term instead of getting into the intolerable position of paying off interest only or being declared bankrupt.

So whatever your reason for that wage advance, live within your means.

Previous | Article Index | Next