Since Christmas is around the corner, we all experience the pressure and the need to give gifts to our family, friends and other love ones. After all, it is better to give than to receive. But not all of us are actually good in managing our finances that sometimes when we think we are saving money by buying things on sale (which if we would think about it, is not really something we need) is actually just encouraging us to spend on stuff that is not in our budget.
So, this should not be the case when we do our Christmas shopping. The activity should not be tainted by our worries that maybe we would go in debt soon because of all the gifts that are in our shopping cart.
Fortunately, there is a solution in the form of a short-term debt of paying for something on an instalment basis and only getting the item after we have paid for it for the full purchase price. Still, like all other debts, we still need to be wise when agreeing to this kind of scheme.
Shop within your means
Even if you would be paying for it on an instalment basis, you still need to consider shopping within your means. You would still pay for the items from your monthly income. You still need to calculate how much you could allot for this kind of expenditure without having to subtract from your funds for utility bills, food allowance, transportation, housing and all of your other monthly expenses. Even if you think that it is fine to buy items you could not usually afford by paying for it little by little, still think about how it would disrupt your monthly cash flow.
Predict unforeseeable events
This might be a bummer given you are doing your Christmas shopping. A laybuy might not be advisable if there is news about your company not raking in the money like it used to. Or else, that the place you are renting is currently being developed and the landlord seeing that the property would be prime real estate might increase your rent when you renew your tenancy contract. Even if you are truly saving money by getting into this kind of payment scheme, still consider unforeseeable events that could possibly happen and might make it hard for you to make payments.
Take care of your credit rating
Since this is still considered to be a debt, missing payments would seriously affect your credit rating. Not to mention it would also make the item more expensive than its actual purchase price since you have to pay for fines or fees. Only get into this kind of agreement if you would be diligent into paying for it monthly.
As a tip, prepare a small notebook or a page in your journal or daily planner and track your spending for the next months that you are committed into this kind of agreement. It would also be easier for you to see when the next payment is due and how close you are to settling all the amount.