Apologies that I’m talking about Christmas like this when we’re only halfway through October but I know that many of us are starting to think a little bit more about it now that the nights are drawing in. There are still 2-3 paydays left before Christmas then if you start now, you have plenty of time to plan which means you won’t need to have a panic right before Christmas and be tempted to turn to a payday loan company for help paying for the festive season.
Lots of us, regardless of how we manage our money through the year, can lose our heads a little bit at Christmas with all of the extra money that can be easy to spend. That, added to the fact that the wait until payday in January is longer than normal, means that many people will be looking for ways to afford the Christmas they want to have and then manage to get through the long weeks of January before payday.
I had a quick search online and came across some pretty scary facts about just how many people struggle at Christmas!
- The average spend on Christmas was £397 per person.
- Approximately 30% of people go into debt to pay for Christmas.
- 1.4 million people turned to payday loans to help pay for Christmas last year.
(The only figures I could find relate to Christmas 2014 but I can’t imagine last year was any better)
Even with the interest rate cap on payday loans being introduced, borrowing £100 over 14 days could still end up costing £115 to repay if you’re not careful and then there’s the problem of what you do if you can’t afford to pay it back. It can mount up very quickly and honestly, there are alternatives.
What are the alternatives to Pay Day loans?
The alternatives may not be ideal and they’re not long-term solutions but if you need money in the short term then there are other ways to go about it. Here are some alternatives to payday day loans that I’ve thought of….
Shops like Cash Converters are there to buy your unwanted items and will give you cash in hand in less than 10 minutes. They buy all sorts so have a sort through your things and see what you can part with. There are shops that will buy your games and consoles from you and Facebook selling sites where people will buy the oddest things. You won’t get the best price but you will get cash that you won’t have to worry about paying back!
Make some money
The problem with making money is that it can often take time to be paid so most of the things I would usually suggest are no good here. Your best bet is to offer your services to friends and family – present wrapping, babysitting and anything else like that would definitely be something I’d be interested in at this time of year if my friends were to offer to do it for me. Even the odd bit of ironing or cleaning because I have so little time at the moment. Just update your Facebook status and see what happens.
Speak to your Bank
They might not be able to help but they might offer you a small overdraft which again, isn’t ideal but is better than a Payday loan! The charges on an authorised overdraft will be much less than the charges on a payday loan and you won’t have the stress of having to pay it back so quickly.
Consider cancelling any non-essential Direct Debits
Do you have any Direct Debits that are due to come out for anything non-essential that you can cancel? Just to clarify, I class essential as being things like mortgage, utilities, mobile phone etc – anything that would affect your credit file or have a negative impact in some way if it wasn’s paid. Things like charitable donations or subscriptions can be cancelled if you’re desperate and will free up some extra money.
Consider borrowing from a credit union
Credit unions are non-profit organisations and their interest rates are much less than a payday loan so they’re definitely worth considering. I’m not sure how quick their process is but you can find your local credit union here.
Don’t be afraid to ask for help
Don’t take a payday loan to pay for food and essentials – speak to your local food bank who may be able to help you.
Also, don’t be afraid to ask close family if they can help you but do make sure you set up a repayment arrangement in writing so you both know where you are. Be aware that not paying them back when you say you will could seriously affect your relationship with them so make sure you stick to the agreed repayment schedule.
Be honest with yourself and other people
As difficult as it is, people will totally understand if you’re honest and say that you simply can’t afford gifts. Give them handmade gift certificates promising them things you know they’ll appreciate. If you always buy gifts then suggest a secret Santa so you just buy one gift and not one for everyone.
Please do remember that these ideas for alternatives to Pay Day loans aren’t long-term suggestions but they may be helpful if you do find yourself in the position where they feel a payday loan is your only option.
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