If you have been in this situation, it might elicit uncomfortable emotions for you: Bills are due but you don’t have enough to pay them all. You may be at risk of losing your cell phone service, or cable/broadband, or perhaps you’re on the second month of not being able to cover a car payment. You might even have a landlord talking the e-word (followed by v-c-i-t-i-o-n).

Some people can borrow money from parents to cover this shortfall. Some have a credit card on which to put those charges. Still others might take out a payday loan. But are any of these options a sign of a sinking ship?

Maybe yes, maybe no. You have to really look at all your expenses relative to all your income over several months and even a year or two to fully answer that question. That’s because in some months a bunch of bills can hit at the same time. For example when you have to pay a quarterly invoice on car insurance, the same month you have to pay Uncle Sam, buy a wedding present for a dear friend or handle a $400 mechanical problem with your car. You might get by most months then get hit all at one time by things that cost more than what current cash flow allows. It’s a rough patch, a timing issue, due to no fault of your own.

Ideally, borrowing money is about smoothing out those rough patches. College and college loans are the extreme example – a four-year rough patch that extends over ten years or more. Car and home loans are the same.

Such things as payday loans are smaller loans for short-term timing problems. In some U.S. states you can only borrow about $250 in a payday loan or as much as $1800. In the U.K., quick quid might total £1500, less if your income is modest (but anyone who is employed is likely eligible for payday loans).

There are of course times when taking out short-term loans or cash advances are inappropriate. Travel to see your mother in the hospital is appropriate, but travel to see your boyfriend in Aruba is not. Money to cover a cell phone bill is smart, but money to upgrade to a snarkier model with a shiny case is not.

You get the picture – it’s all about what is and is not essential.

What’s good about paycheck cash advances is they do not require perfect credit. If you are burdened with debt (education, car loan, credit cards, etc.) it might mean you have a poor credit score. But by providing evidence that you are employed, a payday loans company is most often confident you will be able to repay on the loan from a future paycheck.

This frugal feature was provided by quickquid.co.uk