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Personal and payday loans in the Philippines are commonplace now, just like most other countries with a thriving economy. Borrowing is a part of life and providing you can repay what you owe; it can also be a great way to pay for the things you need, without having to wait until you’ve saved up enough from your salary. Unfortunately, many people get themselves in to financial difficulty by borrowing more than they can afford. Other irresponsible habits such as impulsive spending or ignoring bank statements can also create severe problems. With this in mind, here is Asteria’s version of Money Management 101. This isn’t an exhaustive list and it should only be used as a guideline, but hopefully it will be able to help you make an informed decision before you decide to take out loan yourself.

Pay Off Your Most Expensive Debt First

By this, we mean any loans or credit cards with particularly high interest rates. Ideally, shifting this kind of debt on to a lower interest card is a good plan, however, if this is not an option for you, make a concerted effort to clear any debts that are costing you more than they should. Ignoring this kind of debt will always lead to problems further down the line and missed payments could even affect your ability to be approved for further credit in the future.

Create a budget and stick to it

This can be easier said than done in today’s turbulent economic times but with a little practice and dedication, it is possible to live within a budget. When you are working out how much to allocate each month, always consider payday loan payments or personal loan repayments before you start earmarking funds for treats and trips away. Similarly, food, rent, bills and medical expenses should be taken care of before you start shelling out on expensive streaming services or new clothes you don’t really need.

Always Check Your Statements

Not checking bank, credit card and loan statements is arguably the number one cause of unexpected financial difficulties. Cybercrime is on the rise and hackers have more ways than ever to get at your details. If you fail to check your statements each month, it could be a long time before you realise money has been taken from your account. Though providers and banks do generally have stringent security measures, they don’t have the time to monitor every transaction that is made, so always make sure that you are doing your bit, too. Set aside a particular day in the month where you will spend a few minutes checking in on your statements. Most banks and loan providers now use apps that can be accessed on mobile devices, so this is something that should only take you a matter of minutes. Don’t get caught out by criminals. Always check your statements regularly.

Use Payday Loans as a Last Resort Only

Though payday loans in the Philippines are commonplace and most people who use them can confidently pay back what they have borrowed, the higher interest rate means that for some people, increased debt becomes a problem. Always consider other options before deciding to opt for a payday loan. Extra income from a part time job or selling unwanted goods could be an option if you only need a small amount of cash, whereas slightly more drastic measures such as downgrading a family car or moving into a smaller property could be an option, too. If you are confident that you are going to receive enough money to cover the repayments for a payday loan, then there’s no need to worry but if, like some people, you are considering this option because you are running out of money, it is advisable to think this through very carefully before you sign up to anything officially.

Never Pay More for Goods and Services Than You Need to

This sounds much easier than it really is in real life, but with a diligent approach to price checking and the willingness to shop around, it is possible. Some common mistakes are things like buying bottled water and snacks in places such as airports or motorway service stations. As these businesses have a cornered market, they often charge a premium that makes all of their products far more expensive than they would be on the high street. Hidden charges are another source of unnecessary spending for many people. Avoid extortionate booking and processing fees for things like cinema and theatre tickets by picking them up in person at the box office, rather than ordering online.

When shopping for clothes and shoes, always shop around to compare prices. Though there is an argument for convenience, unless you are very wealthy, saving money wherever you can be usually a good approach that pays off dividends later in life.

Avoid Lending Money to Friends and Family

Though it may seem as if you are being kind at the time, this can often lead to embarrassing situations further down the line. Unless it is a serious emergency and you can comfortably afford to part with the cash, advise anybody who asks you for money to consider a personal loan instead.

Pay Off Credit Cards on Time

If you have spent a lot on your credit card in a month, the worst thing you can do is let the debt sit there for a long time as this means you will be paying interest. Try to pay off credit cards in full so that you can keep a good credit score and avoid debts spiralling out of control.

Live Within Your Means

Even if you choose to use personal loans to help you, its important to make sure you are living a lifestyle that is suitable to your income level. Be realistic and accept that luxury items and treats may have to be a rarity for you until you increase your income. It takes a lot of self-discipline, but it is possible.

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