National Payday Scholarship 2012 Official Entry SealBy: Lauren Brugger

Unforeseen expenses affect individuals every day. Whether the need for new car tires, a steep decline in income, or medical bills, short-term financing allows people to continue perpetuating forward in life. While short-term financing has its downfalls, such as interest, strict repayment terms, and added debt, the benefit of sustaining one’s financial stability is priceless. Responsible adults everywhere are struggling in the current economic climate, often living paycheck to paycheck even as they budget within their means and work to pay off debts acquired in a more prosperous time. Life events, such as unemployment, illness, and car issues, have the ability to wipe out a family’s savings and send them into survival mode. Without the availability of short-term financing, these individuals may fall further into despair. Short-term financing allows these individuals to continue to forge through the tough times towards a better future.

No single demographic is affected by the substantial financial burdens unforeseen costs. Many people find themselves in situations where yesterday they were financially stable, but today they struggle to make ends meet. Not only is this situation a financial stressor, but it has emotional, mental, and physical effects on individuals and their family and friends. Financial strife compounds the negative aspects of one’s life, creating a seemingly unbearable situation. Short-terms financing allows individuals to reduce their stress level and continue on in life. The importance of not allowing finances to paralyze one’s ability to live is imperative. The cycle is vicious, leading to a downward spiral. The issue must be addressed immediately to ensure it does not lead to the demise of a person and his financial status.

While the effects of financial peril seem overstated, one cannot fully comprehend the toll financial instability takes upon an individual. The problem is dealt with in various ways depending on the person. However, for most the unavailability of funds creates a challenging hurdle to overcome. For instance, if one does not pay for their rent, he incurs a penalty fee. This fee then adds to the original amount he was unable to pay, raising the debt. If he is unable to cover the costs within a specific time, consequences can be dire. He may be reported to a crediting agency, which may negatively affect his credit score. The lower score can lead to difficulties obtaining loans in the future, possibly jeopardizing his ability to work a steady job or provide shelter for his family. Another issue he may encounter is the loss of his home. As a homeless individual, he will have declining hygiene and health, creating heightened health care costs, another added debt he must pay. The inability to pay his rent can create catastrophic effects. The slippery slope presented may not always occur, but it certainly is the series of events some individuals experience. The aftermath of financial strife may not always be extreme. However, individuals will experience some negative effects of varying severity in conjunction to their financial issues.

Some individuals view short-term financing as an easy way out or money to fund the life they can’t afford. However, for responsible individuals, short-term financing is a lifeline and a means to a better end. In the end, borrowers must pay back their debts. This repayment may cause financial strife inherently, but may be a lower cost to pay than the cost of braving the original financial event with no added income. Short-term financing allows people to carry on with their lives avoiding the crippling effects of not being able to make ends meet. Overall, the availability of short-term financing to individuals can make or break an individual’s financial stability.

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