Woman using calculator on desk full of bills and statements

 Woman using calculator on desk full of bills and statements © Sheer Photo, Inc/Photodisc/Getty Images

The title of my new e-book is "There Are No Dumb Questions About Money." No, seriously. Asking questions is the way we learn how to handle our finances, and the only dumb question is the one you don't ask.

There are, however, plenty of dumb answers to money questions, as well as lots of stupid solutions to money problems. Desperate people looking for a quick fix often wind up in far worse holes than when they started (thanks, sometimes, to the unhelpful ministrations of whole industries dedicated to taking advantage of them).

If you have got a money problem, here are some of the stupidest "solutions" to avoid, along with some alternatives.

Borrowing from a payday lender

Payday loans seem convenient. You don't have to have good credit -- you just have to be employed or getting regular benefit checks, from Social Security, unemployment or other sources.

But you'll pay at least $15 for every $100 you borrow through a payday advance company, according to the Center for Responsible Lending. That fee for a two-week loan translates into an annual interest rate of about 400%. Worse, most borrowers who take out these risky loans come back again and again, the center's studies found, either to roll over their existing loan because they can't pay it off or to borrow more. Either way, they rack up more fees.

Payday lending doesn't solve the underlying problem, which is often poor money management. Many people who start taking out payday loans just keep borrowing until they default. Then what started as a quick fix turns into a nightmare of collection calls and, sometimes, bankruptcy court.

A payday loan isn't a reasonable solution to either a temporary crisis or a chronic shortage of funds. Your best bet is to avoid the need for an emergency loan by building up a small cushion, even if it's just $500. Other alternatives:

  • Get some budgeting help. If you're chronically short of cash, a budgeting counselor can help you track where the money goes so you can get expenses in line with your income. The National Foundation for Credit Counseling can help.
  • Turn to your community. Food banks, clothing banks and other community resources can help you cover the necessities when you're broke. If you're poor, you may qualify for government help with groceries, housing costs, utilities and child care (check with Benefits.gov).
  • Sell something. Raise money fast with a yard sale, an online auction or an online classified ad.
  • Ask your employer for an advance. Some companies will let you tap your next paycheck for free or a small fee.
  • Ask a family member or friend for help. Even if you're charged interest, you'll pay far less than you would to a payday lender.
  • Take a cash advance from a credit card. If you have a credit card, you can tap it for emergency cash. The interest rates are high -- often more than 20% -- but better than those for a payday loan.

Buying a car from a 'buy here, pay here' lot

Lending to people with bad credit got a lot less popular after the financial crisis. While credit standards have eased somewhat, many people still have bad or nonexistent credit and have trouble getting a loan.

"Buy here, pay here" lots have sprung up to take advantage of the situation. Dealers mark up the prices of older, high-mileage cars to sell to people with few other options. Financing comes with high interest rates, usually around 24%, and borrowers are often required to make their monthly payments in person (the better to repossess the car, if necessary). A single missed payment leads to repossession, so the dealer can sell the car again.

If your hoopty finally bites the dust and your credit is lousy, you don't have many good options. A few charities try to hook up the working poor with wheels, among them Ways to Work, 1-800-Charity-Cars and Cars 4 Causes, but there are typically far more applicants than available cars, according to an investigation last year by the Los Angeles Times.

If you can scrape together $2,000 or $3,000 in cash, you may be able to get a decent car deal from a private seller via eBay or Craigslist, advises Edmunds.com, a car research site. Or consider applying for a car loan from a local credit union. These member-owned organizations typically have better rates and more flexible lending terms than many mainstream banks do.

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