What’s your favorite day of the week? Is it Thursday? Friday? You can’t pick Saturday and Sunday. That’s the weekend, and it doesn’t count (unless you work weekends). Does your favorite day come every week or every other week? For most of us, our favorite day of the work week is payday. Let’s face it. It’s what keeps us clocking in every day. But for those with too much money tied up in payday loans, pay day isn’t much different than any other work day. In a lot of ways, it may be worse.

Most payday loan places are happy to lend you up to 60% of your average take home pay. In many states, you can take out two or even more payday loans (generally from different places). It doesn’t take an economics professor to figure out that borrowing more than 100% of your take home pay, when you have to pay it all back, with interest, on the day you get your check, is a very bad idea.

Of course, when you need to pay more than you’re bringing in, your only option is to pay off the interest and borrow the money again (called re loaning). The problem is, you end up paying 10%-14% interest every single week until it’s paid off. And, as long as you have more than one payday loan out there, it’s awfully tough to pay them off.

I don’t want to paint a doom and gloom scenario. The truth is that you can get out of the mess even if you’re up to your eyeballs. Here’s what you do:

• Ask about your state’s regulations on payday loans. Many states require lenders to give you the option of paying off your loan in increments. Of course, that will probably mean no more payday loans from that company, and they’re likely to be pissed at you. So what.

• If you can’t pay your loans down in increments, try taking out a slightly smaller loan every time you borrow. You’re generally better off reducing just one loan at a time, in an attempt to get rid of one loan completely before you start reducing the other ones. One small step at a time, you can get yourself out of the cash advance hole.

• After you pay your loans off, start putting at least half of the money you had been spending in interest into a long term savings account. You can tell yourself you don’t make enough money to save all day long, but the truth is that if you can afford to pay it every week in interest, you can afford to put it in the bank for yourself.

Once your payday loans are all paid off, you can take a deep breath and relax. Celebrate. Maybe even buy something nice. Just make sure it’s not so big that you need to take out an advance to get it.

Photo via greggoconnell