So you’ve just paid off your payday loan?

Congratulations! We bet the air is feeling lighter, the grass is greener, and your wallet is a little heavier (or at least it will be after your next paycheck). You know that first paycheck in months that didn’t go to pay off your last payday loan, plus interest. Now that you’ve broken free, you’re probably telling yourself, “I’ll never get caught up in that again.”

Good! Now, how are you going to make sure that happens? One wise person put it really well when he said, “people don’t plan to fail, they fail to plan.”

So, if you’re going to stay out of the payday loan cycle, you’re going to need to have a plan. But have no fear, as people who have been in the cycle ourselves, we’re here to help you with that.

This is a really complicated plan, so get ready to do some serious concentrating. Are you ready for us to reveal the secret?

Save. That’s the secret. OK, I know, it isn’t really a secret, and you probably already thought of it yourself. But here’s the part that makes it work: do it. We all know how. Now we just need to make it happen.

And here’s how: you’ve just spent the last several months making interest payments to a cash advance company. Did you miss those payments? No? Why not? Because you had already written a check out, and you knew they were going to get their money one way or the other.

So, what does that have to do with savings? Everything! You need to start paying yourself the same way you paid them. Treat it like it isn’t optional. In the long run, it isn’t, unless you consider another payday loan a viable option. Because you will be hit with unexpected expenses again, and the only way you can be ready for them is if you have your own money set aside.

Whatever other bills you have, whatever else is going on in life, if you were able to afford to pay the interest to a payday loan company, you can afford to pay it to yourself. If you want to give yourself a bit of a break, consider putting only half of the interest you were paying on your cash advances into a savings account. You’d be surprised how fast your emergency fund grows.

Here’s the final step, and probably the most important. After you’ve been saving for a while and that number in the savings account ledger starts to look really big, you’re going to be tempted to go out and buy something with it. Don’t. Every family should have at least $5,000 cash on hand for emergencies. If your savings account isn’t higher than that, leave it alone.

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