Stop the Borrowing Cycle: Some Advice the Government Could Use

The Borrowing Cycle is one of the most difficult things we will need to overcome.  Imagine a situation where you are under obligation to make a payment and that the lack of doing so will result in a very difficult situation for yourself and your family.  Where do you turn for help?  Can you go to your friends and family for assistance not without humbling yourself?  Can you go to your church or community group pretty much the same scenario?  Many people in these situations find themselves turning to payday loan companies or title loan companies.

Please Please Please, do not do this.   In my youth I was working a good job and had a nice car that I enjoyed very much but I was not very responsible and thus never made my payments I ate out all the time and bought whatever I pleased because I felt I could.  After a few months of waiting patiently for my payments on my car the company finally told me that if I did not pay them what was owed in the next two weeks I would have the car repossessed.  I could not have my car taken from me it was my pride and joy but the bank account reviled a different story I had spent all of my money for the month and would not have any more money until my next pay check.  Of course my family had warned me against buying the car in the first place and my girlfriend was not in any position to help at the time.  So I broke down and went to get a Pay Day Loan.  I needed to borrow $500.00 just to cover the car I signed the paper work and walked away with my money to pay for the car.  I thought everything was great until I went back to make the payment and they told me that I was to pay $625.00  after just 2 weeks they were charging a 25% interest rate on top of the loan.  This left me pretty well broke again and when they said I could renew the loan and only pay the $125.00 I thought that might be the only way I could make it through until my next pay check.  I went on this same way making payments and renewing the loan for over 6 months.  Virtually throwing away well over $5000.00 along the way because they would tell me you have been a great customer we will lend you even more and not charge you more interest this month but then when you want to renew the next you have to keep it that same level I ended up by the end of that 6 months borrowing $1200 every two weeks at 25% compounding interest.  It was not until I got a good tax return that I was finally able to break out of this vicious cycle of borrowing.