Each year, the holiday music is played earlier and the Christmas displays at the stores go out earlier. This year I found a radio station that began playing all holiday music on November 1st, and Costco put out holiday displays at the end of August.
Why the rush to promote the holidays?
Because it is big business.
Some stores make half or more of their income for the year during the holiday shopping rush.
However, if you have debt or your money is tight, the peer pressure to buy a gift for your friends and family as well as acquaintances can cause you to make some unwise decisions.
Here are three ways you should never pay for holiday gifts:
1. Cash advances. Cash advances have their place; they are best used for emergencies when you have no other way to find the money you need. If you have just lost your job and don’t have money to make your house or car payment or to buy groceries, a cash advance can provide a real life line. Taking a cash advance to buy your friend a new necklace for Christmas? Not such a good idea.
2. Using your credit cards. Of course, if you already have the money set aside to pay for the gift, feel free to take advantage of the convenience of a credit card. However, if you are just blindly charging up hundreds of dollars worth of gifts that you know you don’t have the ability to pay, you are not making a good financial decision. Those gifts that cost $500 now could end up costing you $600 or $700 once interest is factored in.
3. Divert money from your regular bills. If you don’t have any extra cash to buy gifts, you may decide to not pay some of your regular bills for the month. In fact, banks often encourage this behavior by giving you one month “off” from making a regular loan payment during the holidays. While this can provide you with some money for gifts, know that the interest will continue to accrue, and next month you will owe even more on the balance than you owe the month that you skip a payment.
Most people want to be generous during the holidays, but don’t do it at the expense of your own finances. Honestly, most people won’t remember the gift that you gave them 6 months later. Do you still want to be paying for a gift that people don’t even remember you giving to them?
What is your favorite strategy for saving money on gift giving?
Post by Melissa
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