Recently my wife and I switched from our regular cable tv provider and switched over to direct tv. With cable we were paying almost $100 a month for their service. Since switching we are saving almost $50 a month now.

I remember back when i was in high school and there was literally only a handful of channels on tv. Now there are so many different channels that it will make your head spin. We could of honestly just dropped our tv service completely but we decided to not do it.

Another thing we recently did was changed our car insurance which is saving us almost $500 a year. With so many different choices out there it pays to look around a bit. There are so many options that you should always be on the lookout for something cheaper or better.

Another thing that I recently did was I took the data plan off of my cell phone plan. For my phone and my wifes phone we were paying $25 a month. When we got new phones about 6 months ago we added data onto both phones. We have hardly used it at all. I figured that it was a waste of money if we are not even using it so I dropped that.

I am sure there are a few things anyone could drop off their cell or tv plans to save them some money. Look at your bill and see what you don’t need and drop it.

Recently I put my book If Stupid was Illegal we’d be in Jail up on Amazon Kindle for free. You might think “Why would you spend all that time working on your book just to give it away”? But I am a believer in just getting my work out there so people can read and benefit from it and the money will come later.

If you have a book that you have written and the sales are not where you want them to be, just start giving it away.

You can still get my book for free on amazon for the next couple days. If Stupid was Illegal

Pick up a copy and read about all of the stupid financial mistakes my wife and I made.

We have all done it before, we messed something up. Whether its money, relationships or anything else. Its something we can not avoid in our lives. Some people call it a failure but I like to think of it as a learning experience. Its only a failure if you do the same thing again and again.

I am the first to admit that I have messed up so many times its not even funny anymore. Money mistakes being my favorite thing to screw up. But I will tell you something. I learned a lesson from each one of those mistakes and vowed to never do them again.

I talk about the first 10 years of my marriage all the the money mistakes I made in my book

Well now that I have your attention from my completely ridiculous title for my post. Hopefully I can explain it while not making myself look completely stupid. (probably not). Back in 2001 after I was married we went up to South Dakota for our honeymoon. Being the really fun an exciting people that my wife and I are. We spent most of our time playing pool and foosball in the hotel game room.

Also in the game room they had one of those claw machines that have all sorts of stupid stuffed animals in them. Well my wife saw one that she thought was cute and we decided to try it. What I’m going to tell you next may be shocking, but we didn’t win immediately. (Shocker huh?) So we tried again and again and again. Finally we were able to get that one out of the machine. Did we stop there? Not a chance. A few more tries and we got another one out and then another. I’m not sure if you know this but after you get a couple out the animals are much easier to free from the machine.

Well after an undisclosed amount of time and money was spent. And a collection of stuffed animals large enough to open a stuffed pet store, we decided that we had enough fun. We most likely could of bought those animals somewhere else for much cheaper. Its stupid things like the claw machine that keep people broke. You might think that its just 50 cents in a machine. But it could easily be anything like lottery tickets. You dont realize how much you are spending until its all said and done and your broke.

Don’t let the “claw machine” in your life get you.

So you have worked your butt off to pay your debt off. Now what? You have now freed up your greatest wealth building tool which is your income. What kind of good can you do for someone else?

What is that thing that you have always wanted to do but didn't feel you were able to because of all the debt that way hanging over your head? Take a step back to look deep within yourself and find that true passion that has been lying dormant for years and let it out.

I am sure the title of this blog is making you wonder. What is he going to talk about? Well for those of you who don't know me I am deathly terrified of snakes.

So now lets go back to the year 2005. My family is living in a house that for some reason in the summer there were snakes all over the yard. You couldn't mow the yard and not see 10 snakes. We even had one downstairs in our laundry room. It was only about 3 inches long but for me it might as well of been 3 feet long. I wanted to avoid those snakes by any means necessary.

So I went out and purchased on a credit card a $1000 snake killing machine (aka riding lawnmower). I wanted to keep my feet away from those snakes anyway possible. The good part was that it was fantastic at killing snakes and it cut grass pretty good too. The bad part was that it was put on a credit card at 18% interest. And the other bad part was (yes there is more than one bad part to my story) I only owned the lawnmower for one summer season. We ended up moving to a new place where I did not have to mow the lawn and I had nowhere to store it. So just a few months after I purchased the mower I sold it for only $800. Not to mention all the interest I paid on the credit card which probably took me 2 years to pay off.

I guess the moral to my story is. Do not use the fear of something to rationalize you to buy something that you deep down know is stupid.

What is it that makes us humans not want to change our habits and behaviors? Are we scared or have we just gotten used to living in comfortable misery?

Speaking in terms of your personal finances do you like where you are at? If your answer is "no" then I think its time to change a few things.

We complain about having so many credit card bills, but we keep on charging on them. And if we ignore the problem it will go away. If you dont like where you are at then change your situation. Sitting around and hoping your debt will go away on its own is crazy.

I challenge you for three months to get yourself on a plan to start paying down your debt. If you don't like getting out of debt, then by all means go back to the way you were and have fun. But I am sure you will enjoy living on a plan and with a purpose much more.

Try something different and challenge yourself to get out of your comfortable misery.

I am more than willing to help anyone get themselves back on track.

I suppose my story of financial stupidity would start back in 1999 when I got out of high school and started at the community college. I took out a $2500 school loan (this loan will stick around way longer than I planned for more about it later). I never had to make any payments on that loan until I was finished with school or until I quit. Which I never finished my degree. So about 2001 I was starting to make payments of $50 a month.

2001 was also the year I was married to my wife Dawn. I came into the marriage with no other debt besides my student loan. My wife on the other hand had a few credit cards and a couple small personal loans and a car payment.

Just like many marriages we barely had any money to pay the bills let alone get debt paid off. Around 2002 or so my mom introduced me to Dave Ramsey. I had never heard of him before and I listened to a few of his tapes(yep cassette tapes). I thought this guy was an idiot. I mean he lost millions of dollars why on earth would I listen to someone like that?

Now being at the ripe old age of 22 of course I knew everything so I wasn't about to listen to anyones advice. I mean my knowledge was solid and I didn't need help from anyone.

We purchased a car in 2002. It was a 2001 Chevy Lumina. Unfortunately in late 2003 the car was wrecked. We did not even get enough money from the insurance company to pay it off. So we kept paying on it for another 6 months. I also bought another car from my mother. I paid to put a transmission into the car. So that put me another $1500 into debt. Im proud to say though that I am still driving that car today. Its a 1994 Chrysler Lebaron.

Sometime around 2003 I thought it might be a good idea to apply for my own credit cards. We couldn't pay for the credit cards we already had, why not add a few more onto the pile right? I ended up being approved for 3 different cards. Two of them had limits of $500 and the other one had a limit of $2000 I believe.

The two smaller cards I used primarily for buying gas, food, and crap. The larger $2000 limit card I used about $1000 of it to buy some stupid course I saw on TV. I honestly do not remember exactly what it was. But obviously it turned out to make me $0. Lesson learned with that dumb idea.

In April of 2004 we ended up purchasing another car for $14,000 to replace the car that was totaled. It was a 2003 Mitsubishi Galant. We didnt have enough money to pay the taxes and plating of the car. So we went and got a personal loan of about $1500 to cover those costs.

At the end of 2004 I thought it would be a good idea to go through a debt consolidation company. We had a total of 6 credit cards at the time that we put into the program. We paid them around $250 a month and that payment was split up between the 6 payments. It did absolutely no good using that company. As with lots of those companies they dont pay your debt to your creditor on time and it just creates more of mess.

In March of 2005 my mom had caught wind of my credit card debt and thought it would be a good idea if we borrowed $16,000 from her and my step dad to pay off our creditors. They meant well and it seemed like a good idea but looking back on it, it was the worst thing we could have ever done. During the time we were paying them they never mentioned anything about the money. But you felt like they were hanging that debt over our heads and it was very stressful.

Also in 2005 I decided that I NEEDED a new computer. So I opted for the Dell credit card and spent about $1000 on a new computer. Luckily today I am still using that computer and typing this very story on it now.

Towards the end of 2005 I was getting really stressed out with the debt and decided to take it one step further. Like I didn't have enough debt already. I thought it would be a good idea to go and apply for a bunch of credit cards. (I know it just keeps getting worse right?)

After all was said and done I had gotten myself a total of 11 more credit cards. I had a Dell, 2 HSBC, 2 Chase, 2 Capital one, 1 Juniper Bank card, 1 Paypal, 1 Citi, and a Music 123 credit card. These cards totaled a combined credit limit of over $11,000.

By the end of 2006 I had probably maxed out all of those credit cards. Put those cards on top of the debt we already had with a car loan, personal family loan and another personal loan.

We had personal loan through Beneficial. (They are not very beneficial if you were wondering). This loan was around $3000. About a year after we got that loan they sent us a check in the mail for $5000. And of course by cashing this check it would create a new loan for us. Good idea right? Well you probably guessed it. Yeah we cashed it. So now we have a loan with Beneficial for $8000.

So by now we have around $40,000+ in debt. I know there is other loans we got throughout the years that I honestly can't remember.

We were able to keep up with minimum payments for a while. But we knew it wouldn't last that long. The payments were slowly sucking the life out of us. As a desperate plea I started looking for someone to help us. Like an idiot I thought that a debt settlement company would help us. Yeah Right!! So I signed up with them anyway. The company I signed up with was called Credit Solutions. They are a total scam. We ended up paying them around $1000 and they only settled 2 cards.

At this time we were not paying anything on any of these credit cards and they were getting higher and higher balances each day. Some of these companies were offering me settlements as much as 70% off the balance, but I just did not have the money to settle with them at the time.

Then something happened that really scared the crap out of me. I came home one day and had a orange note stuck on my door from the sheriff. 2 of my credit cards had started the proceedings to sue me. I immediately called the lawyers handling the case and set up a payment plan with them. Why I ever let it get that far is beyond me. And let me tell you one thing. The lawyers that handle the credit card cases are way easier to work with than the credit card companies.

This is now beginning of 2007 and I am finally starting to see that all of my stupid ideas are not working. So I start listening to Dave Ramsey a lot more. I was already listening but I guess I wasn't hearing what he was saying before. In May of 2007 Dave was going to be doing a live event in Kansas City which was about 5 hours from where I live in Nebraska. About a week before the event my wife and I ordered 2 tickets and we were off to see Dave. Let me tell you seeing Dave Ramsey live was very life changing for us.

A month or so after we saw Dave we had a yard sale to raise some money for our emergency fund and I got a new job in the summer of 2007 which was paying me quite a bit more than I was making before. We were really able to start pounding away on the debt.

We really started getting all those smaller debts out of the way and start making some real progress.

Now we are towards the end of 2008. My wife received a sum of money and we were able to pay off our car and loan to my mom. Remember that school loan I talked about in the beginning that started it all? Well it was at this time still sitting in deferment. June of 2009 I was able to pay that off completely. Just 2 months shy of 10 years to pay off a stupid $2500 debt.

At the end of 2009 I quit my job because it was driving me insane. My wife and I agreed that I would stay home for the time being. We are almost debt free. We still have about $4,000 left. But have made a ton of progress. I am currently working on some different ideas for starting my own business.

My goal is to try and help people avoid my situation at all costs. It is not fun to go though and I will try my hardest to keep people out of where I have been.

Hopefully my story doesn't sound too familiar to anyone. If it does remember you can work your way of most problems you get yourself into.

For the year 2010 the average car payment was $492 over a period of 63 months. To me that just seems crazy. I can think of a lot better things to do with $492 a month beside put it into something that drops in value like a rock.

Lets say you were to take that $492 a month and save it up for a year. You would have almost $6000. Don't you think you could buy a pretty good used for car $6K? I believe you could.

A brand new car will lose 60% of its value in the first 4 years. That doesn't seem like a very wise purchase to me. If you buy a car that is at least 2 years old its already taken a majority of the price hit. And you can get a much better deal.

For example a car that costs $30,000 will be worth only about $12,000 in 4 years and you will still owe around $6,000 on it.

Try taking $500 a month and saving it for a year and purchasing yourself a good used car for cash. Your going to get a much better deal.

Recently I came across an article that did a survey on husbands and wives about hiding purchases from each other. It said that 80% of all married couples hid some sort of purchase from either spouse.

To me that seems to show signs of immaturity. Why is it that so many couples are hiding purchases from each other? Are they ashamed of what it is they are purchasing or doing something they are not supposed to do?

The #1 cause of divorce in America is money problems. Now do you suppose that would have something to do with spending without the spouses vote in the matter? I think so.

Now I think its time that people wake up and start acting like grownups and not being a little boy or little girl that just has to have something so bad that they are willing to hide it from their spouse.

The following is a list of the common characteristics of the typical millionaire. This information is found in the book The Millionaire Next Door

1. They live well below their means. In general, millionaires are frugal. Not only do they self-identify as frugal, they actually live the life. They take extraordinary steps to save money. They don’t live lavish lifestyles. They’re willing to pay for quality, but not for image.

2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth. Millionaires budget. They also plan their investments. They begin earning and investing early in life. The authors note that “there is an inverse relationship between the time spent purchasing luxury items such as cars and clothes and the time spent planning one’s financial future”. In other words, the more time someone spends buying things that look good, the less time they spend on personal finance.

3.They believe that financial independence is more important than displaying high social status. The authors spend far too much time beating home this point: usually millionaires don’t have fancy cars. They drive mundane domestic models, and they keep them for years. (There’s an entire 31-page chapter devoted to how millionaires shop for cars. It’s tedious. It may be the worst chapter I’ve ever read in any personal finance book. And the authors go on ad nauseum about the average price per pound of various vehicles. There’s even an appendix showing the average price-per-pound for the most popular models.)

4.Their parents did not provide economic outpatient care. That is, most millionaires were not financially supported by their parents. The authors’ research indicates that “the more dollars adult children receive [from their parents], the fewer they accumulate, while those who are given fewer dollars accumulate more”.

5.Their adult children are economically self-sufficient. This chapter is fascinating. The authors clearly believe that giving money to adult children damages their ability to succeed.

6.They are proficient in targeting market opportunities. “Very often those who supply the affluent become wealthy themselves.” The authors discuss how one of the best ways to make money is to sell products or services to those who already have money. They list a number of occupations they feel have long-term potential in this area.

7.They chose the right occupation. “Self-employed people are four times more likely to be millionaires than those who work for others.” There is no magic list of businesses from which wealth is derived — people can be successful with any type of business. In fact, most millionaire business owners make their money in “dull-normal” industries. They build cabinets. They sell shoes. They’re dentists. They own bowling alleys. They make boxes. There’s no magic bullet.

This is a list of the 7 reasons why its always a BAD idea to lease a car.

1. If you get in an accident and the vehicle is totaled, you’ll still be responsible to pay back the full lease contract amount. Even if the insurance company gives you back less than what you owe to the dealership, you’ll be responsible for the full amount. If you do go with a lease, at least be smart enough to buy “gap” insurance which covers you for that difference that you would owe to the dealership.

2. Many times, the lease agreement will be for 5 years/60,000 miles. So, if you go over that 60,000 and keep it until the 5 years is up, you’ll pay a penalty for every mile over 60,000 miles. Think about how many miles you put on a car each year. Most people use well over 12,000 per year.

3. If you lose a job or experience a heavy time of financial hardship and cannot afford the payment anymore, the dealership will recover the car, sell it an auction, and if they sell it for less than you owe for the lease agreement, you will be legally responsible to pay the difference.

4. The car is NOT yours, yet they still make you pay for the maintenance of it.

5.Again, you can’t claim the car as an asset. It is technically still an asset of the dealership that leased it to you.

6. A lease starts a trend of perpetually paying a car payment. If you never paid a car payment and the average car payment in America was $350 a month, putting that $350 a month in a mutual fund that made 10% would become $791,171 in 30 years. That is astonishing, and what astonishes me more is that there are people out there that will continue to defend leasing cars and financing cars with no money down because the “maintenance costs” are so much lower for a new car. Give me a break.

7. If you decide to take the option to buy the car at the end of the lease term, you’ll have paid much more than the cost of the car even if you had financed it.

By thinking that consolidating your debts into a single payment is going to change your life you might want to stop and think about some things first.

Here is an example

Credit Card #1 $100/month

Credit Card #2 $70/month

Loan $250/month

So you have a total of 3 payments equaling $420 a month. With consolidation what happens is you would take out a new loan and pay each of those debts off. Leaving you with one payment of lets say $350. Sounds like a good deal right? Wrong!! You never changed your behavior and you started using those credit cards again. OOPS now you have a $350 loan payment plus 2 more credit card payments of $100 a month. Now your paying out more money each month that you were in the first place.

Now debt consolidation doesn't seem like such a good idea does it? If your not going to change your spending habits then consolidation isn't going to help you one bit.

Change your behavior. Quit using credit. And stop the cycle of debt.

With today being the 4th of July nothing reminds me more of this holiday than burgers on the grill and fireworks. As a kid I remember how it was. I started thinking about fireworks as soon as the snow melted in March. I have seen that pretty much all of the fireworks stands around my town accept credit cards. Seriously?? How stupid is that? Your putting something onto your credit card at 18% interest that goes up in smoke. LITERALLY.

You need to stop and ask yourself before you go out an buy a bunch of fireworks on credit. Do I really want to pay interest on something that is gone in a few seconds? I don't think so.

The best way to stay safe this 4th of July is to use cash to pay for your fireworks, it will hurt a lot less next month.

Using envelopes to keep track of your spending each month is a great way to not overspend. The concept is simple just keep your money in envelopes for things like groceries, gas, clothes etc.

I'm going to use food as an example. Lets use a family of 4 spending $600 a month on food. What you do at the beginning of the month is take $600 out of your checking account and put that money into the envelope. That money is to be used for food only. And once that money is gone its gone. If you spend it all in 2 weeks there is no taking more money from somewhere else to add to the food unless you go back and re-figure your budget.

If you are paid every 2 weeks you can fund your envelope twice a month. Even if you are paid every week you could do $150 a week into the envelope. Whatever is easiest for you as long as your not going over your budgeted amount.

Food is one of the hardest categories to estimate how much you spend. So the first few months I would over fund it. Keep track of all you spend and over the next few months it will start to become natural.

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I suppose this is a question a lot of people ask themselves at the end of the month. Where did my money go? It happens all the time. Money comes in and money goes out, but where does it go?

This is where a good budget comes in handy. By writing everything down that you spend you can see exactly where all your money is going. When we started doing a budget it felt like we got a raise. We had categories for everything and it kept us from going to the ATM and taking $20 here and there. During the month it can add up to a lot of money that is wasted on stuff you can't even remember.

A budget might sound like a scary thing but all a budget does is tells your money where do go, instead of wondering where it went. Also using an envelope system for you cash purchases each month is a great way to stay on track.
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When two people become married the money becomes both of theirs. There is no more "His Money" or " Her Money" Its "Our Money". There is no hiding money from your spouse or spending money without first discussing it together. I have known couples who each have their own separate checking accounts. That seems really weird to me.

My wife and I do not spend even $1 without letting the other person know what we are doing. Not taking the time to do a budget together and discussing the finances is a good way to bankrupt your bank account and marriage.

The number 1 cause of divorce today is money fights and money problems. Don't become a statistic. Do something about it today and start working with your spouse on the finances. It will pay off in the long run.

You have seen them on tv many times before. "Let us settle your debt for pennies on the dollar" They advertise being able to settle for 60% off of what you owe. Sounds like a great idea doesn't it? I went through this disaster first hand and want to prevent anybody else going through it.

First thing you need to ask yourself is. Are you behind on your credit card bills? If you answered no, then be prepared to get behind. Because the first thing they are going to tell you to do is to stop paying your bills and to not communicate with your creditors.

But of course they are not going to do this for free. What they do usually is they have you make monthly payments to them. I believe we paid somewhere around $200+ a month. The first 3 months of payments go right into the pocket of this company. Then after that they get half of your monthly payment and the other half goes into an account to "save up" money to pay when a credit card will settle with you.

A credit card company will not settle with you unless your usually 3-6 months behind on your bills. When you are so far behind the credit card company will make you an offer to settle your debt. In the meantime while we were "saving up" with this company to settle our debts, I was sued by 2 different credit cards. That is about enough to scare you to death. I immediately quit using this company and worked out the debts myself

Why would you purposely stop paying on debts that were not behind in the first place to wreck your credit and fill your life with harassing phone calls from credit card companies?

Work through your debts yourself. Don't look for a magic pill to solve all your financial problems because it will only lead to grief.

Cosigning would rank up there in my top 5 of stupid things to do. First off why do you think banks ask for a co-signer? Its because they know your not going to pay and that you pose too much of a credit risk. So if you are asked by a friend or family member to cosign a on a loan, you better be ready to pay for it.

If you need a cosigner for a loan then you do not really need a loan anyway. But if you follow what I write you shouldn't be borrowing money in the first place.

I have a friend who cosigned on a student loan for his girlfriend and to make a long story short. They are now broke up and guess what?? She isn't paying on the student loan so he is now stuck paying for someone else's education and no longer seeing the girl. Doesn't sound like a good deal to me.

I'm will but it as simple as possible. Cosigning is stupid. If you cosign you are stupid. Unless you like to pay other peoples bills, Don't cosign.

Get it? Got it? Good

I have heard many people say "If I could just win the lottery everything will be ok" I'm just going to say that your NOT going to win the lottery. The lottery is a tax on people that can't do math. Haven't you ever seen the kind of people playing the lottery? Yeah I have too. You are more likely to be struck by lightning 5 times and live than you are to win the lottery.

Go stand on your roof with a metal rod in lightning storm and see if you can get struck 5 times and live. If by some miracle you live, go buy a ticket and you might win (probably won't though)

Heres a better idea. Save your money and do something useful with it. You will have a much better return on investment if you just save and invest it.

It might seem like a good idea you just need some money to help buy a new car or need money for school. So you decide to head to the bank of Mom and Dad. This is a recipe for disaster. You might think "But its my mom, nothing bad will happen if I borrow money from her".

That is where you are wrong. Remember that 'The borrower is slave to the lender'. No matter what you think will happen its going to create tension between the borrower and the lender.

I learned this the hard way. By borrowing money to pay off credit cards. Later on I learned its just a lot easier to do things for yourself. When you go over to their house there is always a weird tension in the air. All you can think about is getting that family loan paid off. I am so glad that it is done. We have learned it the hard way but it has taught us a lot so I can relay this message onto others.

Why to people cling to their credit score like its the most valuable thing in the world? A credit score actually helps keep the bank in business. To keep a high credit score you need to borrow money, borrow it often and pay it back. What is the point? People need to stop worshiping their credit scores.

Lets look at what makes up a credit score.

35%- How you pay your bills

30%-Amount you owe and available credit

15%-Length of Credit History

10% Mix of Credit (credit cards, loans, ect)

10%-New credit applications

But what if I want to buy a house, Don't I need a good credit score? No you don't. Banks can actually give you a mortgage loan by doing what is called manual underwriting. This is where they actually look at you as a person (if you paid rent on time, job history, ect) And not just look at your Credit Score.

If you stop borrowing money your credit score is slowly going to go down, eventually it will be zero. But does that really matter? Not if you promise to never borrow money again. And yes its true that car insurance companies are using your credit score to determine your yearly premium. But I would rather pay a little more on my insurance than keep borrowing a bunch of money just to keep a worthless credit score high.

Some call it entertainment, some call it gambling. I call it just plain stupid. I just can't seem to wrap my head around what is so entertaining about losing money? I see absolutely no point in it.

But I just want to be able to go relax and have some fun with my friends, So whats wrong with that? I'm sure there are a lot better things to do than waste your money on this meaningless pastime.

Somebody has to be a winner right? Yeah and that someone is the casino. Why do you think they have multi billion dollar facilities? Its not because they pay you out a bunch of money.

What is really sad is the elderly person that brings his social security check to the casino hoping to win it big. And walks home with nothing. Its nothing more than legalized robbery.

Your desperate for money and don't have enough to make it until next week. Should you get a payday loan? Absolutely not!! Payday loans are one of the worst financial products on the market. Lets take a look at exactly how these rip-offs work.

Lets say you want to borrow $500. What is going to happen is your going to write them a postdated check or agree to a authorized withdrawl for $575. In return you would get $500 cash and after 2 weeks they would cash your check for $575. But that is rarely what happens. A typical borrower will not have enough money to cover the check so they will "flip" or "rollover" their loan for another 2 weeks. On average a borrower will flip their loan 8 times before paying it off. In this example that is an APR of 390%. Doesn't sound like such a good deal anymore does it?

High interest payday loans are illegal in 15 states including Washington DC, US Virgin islands and Puerto Rico. That just goes to show you that these loan companies are praying on poor people and need to be shut down everywhere.

This blog stresses the point of having an emergency fund which would keep you out of the payday lenders office.