
The Pros and Cons of Payday Lender Apps
The benefits and drawbacks of using payday lender apps. Plus, an alternative option with no interest đ
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Before taking out a cash advance, understand how to create a budget and manage expenses to avoid financial trouble down the line đ
Maybe youâre hit with an unexpected car repair. Or you need help with a bill right before payday. Whatever the case, a cash advance can sometimes be a solid option to tide you over until you get your paycheck.
In fact, a cash advance with 0% interest can generally be a much safer option than the payday loans out here literally charging 600% interest. Especially if you have bad credit: with a cash advance from Cleo, there are no credit checks required.
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You should still be careful when taking out cash advances to avoid becoming over-reliant on them. Cleo is the money app designed to eventually help you stop needing cash advances, so as well as a cash advance, you can also get access to a ton of free budgeting features.
In this blog, weâre gonna talk about the importance of budgeting when using a cash advance and provide some tips on how to budget using Cleoâs free features.
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First and foremost, budgeting is super important when taking out cash advances because it can help you avoid falling into a cycle of debt. Itâs easy to become trapped in a cycle of taking out and repaying cash advances, especially if you don't have a plan in place for repayment.
Without budgeting, you might find yourself using cash advances to cover everyday expenses, or taking out one cash advance to repay another. With a solid budget in place, you can deal with the root problem: the reason you didnât have enough cash to make it to payday in the first place. Â So you can avoid taking out cash advances in future.
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Always be aware of the fees and interest rates associated with your cash advance. A Cleo cash advance comes with 0% interest, so if you get $170, you repay $170. But if your cash advance comes with interest, youâll need to do some math to make sure you know how much youâre repaying. Check out our article on calculating the true cost of a cash advance if you wanna know more about this.
Once you know the true cost, you can make sure you factor this into your budget correctly.
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The first step to budgeting is to track your income and expenses. This will give you get a clear picture of your financial situation. Straight off, youâll be able to see if you have enough cash to pay the cash advance next month, or if you need to put a plan in place.
After youâve downloaded Cleo for free, youâll need to connect your main bank account. Donât worry, Cleo will never move any money around without your consent. At this point, our super smart AI just uses this information to track your incoming money and expenses.
Once you have a clear picture of your income and expenses, Cleo will create a personalized budget that works for you. Hereâs how it works:
         Select the Budget tab, then under Next Steps youâll just need to tap on each icon to customize:
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đ Once youâre done customizing your budget, youâll unlock your âleft to spendâ and âleft per dayâ amount. So you can resume your regular purchasing, without ⨠The Guilt ⨠hanging over you.â
Sticking to a budget is also crucial. So Cleo will call you out when youâre about to hit a spending limit.
As you go, you can adjust your budget to suit your needs, and factor in your cash advance. Itâs all about setting realistic goals.
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Once youâve followed the first few steps, you might find that youâve freed up some cash to go towards paying your cash advance.
Especially if you used Roast Mode to see how much you spent on Uber last month đ
Or, you might have discovered that subscription you swore youâd canceled in 2019, and freed up a few dollars there.
Tracked your expenses and you have the same amount of cash as you expected? DW - because youâve now got a track of whatâs essential and non-essential spending, you can move some of the cash from your non-essential spends towards paying back the cash advance.
Set a spend limit on certain areas, like eating out and retail, until youâve freed up the cash for repayment.
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Maybe the most important step. Building a cushion of savings you can fall back on for unexpected expenses.
And with Cleo, you donât even have to think about saving. Just turn auto-save on, and watch your savings build.
Hereâs how auto-save works:
Simple af.
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Budgeting is essential when using a cash advance. A budget and a cash advance are best friends. A budget and a cash advance were who that guy was talking about when he said âand they were roommates.â
By creating a realistic repayment plan, prioritizing expenses, and being aware of fees and interest rates, you can avoid falling into a cycle of debt with cash advances and take an important step toward financial health.
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Thereâs only one thing left to doâŚ
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Enjoy this post? Give it a share or send it along to a friend. You never know, it could make a big difference. Big love. Cleo đâ
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The benefits and drawbacks of using payday lender apps. Plus, an alternative option with no interest đ
How to reach your money goals đ
Learn which factors to consider when choosing an option thatâs right for your particular situation.