Avoid These 3 Ways of Paying for Holiday Gifts

With the holiday season approaching, now’s the time to plan out all the gifts you need to buy. In addition to knowing who to buy for, you must have a clear idea of what you can afford to spend.

Taking your plan one step further, outline the manner in which you’ll pay for gifts.

In a perfect world, you’re able to pay for everything with cash. Not only does this keep you on budget, but it also ensures that you don’t walk away from the holiday season with debt associated with gift giving.

Here are three ways you don’t want to pay for holiday gifts:

•    Credit card. This is where many people turn, as it allows them to buy anything and everything (for the most part), without the need for cash. The potential problem is easy to see: if you overspend, you may not be able to payoff your balance when it comes due.
•    Store credit card. This works in pretty much the same way as a conventional credit card. You apply for one of these because of the benefits, such as the ability to save 25 percent on your first purchase. It sounds like a great idea upfront, but once again, you may find yourself with a balance you can’t afford to pay.
•    Payday loan. Even if it’s not something you’ve considered in the past, it could creep into your mind during the holiday season. It may be one of the best ways to get your hands on fast money, but the interest you pay is reason enough to avoid it.

If you wait too long to plan your holiday gift giving there’s a greater chance you’ll find yourself searching for financial answers. This is why you need to get on the right track today. By doing so, you can avoid the use of credit cards and payday loans in the months to come. Subsequently, you’ll look back in January and realize that you made all the right decisions.

How do you typically pay for holiday gifts? Has this system worked for you in the past? Do you plan on changing anything in the future?