Christmas is fast approaching and for many, the pressure is mounting to supply friends and family members with the best gifts around. We also want our houses to be decked out with decorations while we indulge on a delicious Christmas dinner with lots of wine. But all this comes at a price, of course. Research conducted last November revealed that more than a million people planned to take out a payday loan to cover the cost of Christmas. Shockingly, the survey also found that almost one in ten people were still paying off debts from overspending the year before. In 2012, 500,000 people in London alone sought these short-term loans to cover festive costs.
Many people resort to payday loans thinking that paying back the next month won’t be a problem. But it’s easy for the debts to spiral, and one late or missed payment can in some cases double within a short space of time. In the UK, one in three payday loans are taken out to pay another payday loan.
It’s sad that so many people feel that they have to seek short-term loans in order to get by at Christmas, but is it really worth struggling with money for months or evenyears to come just so you can provide for Christmas?
It’s just not werf it
I know that borrowing from a friend or family member isn’t always an option, but if you’re considering a payday loan I strongly urge you to try to find another way of getting by. If you’re taking out the loan so that you can buy something unnecessary (yes, unfortunately this includes gifts and delicious Christmas dinners) ask yourself whether it really is worth getting yourself in huge amounts of debt for.
I imagine that Christmas can be a particularly difficult time for those with children demanding Xboxes and iPhones, but if you can’t afford to buy them the gift that they want with the money that you have now, are you really going to be in a much stronger position in January or February to pay back the money you owe? I recently wrote about how to easily save up money for Christmas with a few tips for buying great presents without the hefty price tags. One tip suggests that instead of buying your kids expensive gifts for Christmas day, go shopping with them on Boxing Day and treat them to half price presents in the sales.
I’ve also been spending time scouring charity shops for nice second hand gifts (yes, it’s possible).
Have you had any bad experiences with payday loans? Or perhaps you have some money-saving tips ready for Christmas? Let me know in the comments below.