Thursday, April 18, 2013

Christmas Debt Still Have you Down - 3 Ways to Bridge that Financial Gap

Finance
Finance (Photo credit: Tax Credits)
Spending money at Christmas time can take a significant toll in the New Year, with many people starting January with serious debts from the previous year. From dealing with food bills to making payments towards presents, and including the need to meet high energy bills, many people choose to find ways to bridge their financial gaps after Christmas to avoid sliding further into their overdrafts. There are many ways to stabilise your finances in the New Year, which, while representing calculated risks, can help you to get a head start on 2013.

Short Term Loans


For most people, it can be necessary to take out some kind of short term loan in the New Year to cover their spending at the end of the year. There are a wide range of different options available to you for loans, but with the complication that you’ll need a good credit history and report to gain access to loans with favourable interest rates and repayment schedules. A short term personal loan from a bank can be taken out on a 12 to 18 month repayment schedule with fixed interest rates, but only if you’re able to provide a strong credit report.

If you have bad credit, then your loan options are going to be more limited to higher risk deals. Examples of these deals include payday loans, which are repayable when you receive your next wage slip; while payday loans are easy to apply for and receive, you face the problem of paying very high APR on your initial borrowing, as well as extensive minor fees and penalties. In this context, you’ll need to make a careful decision as to whether you actually need to borrow money for an emergency, or whether it’s better to avoid taking on further debt.

Pawnbroking


Another option when it comes to bridging your finances is to use a local pawnbrokers. It’s possible to boost your finances by taking part in a buy back scheme, where you use a valuable item as collateral on a loan; this might involve exchanging jewellery or gold for cash, and then buying back the item by paying for its resale value with interest added. Alternatively, you can use a pawnbroker to directly sell your items, while also taking advantage of short term cash loans and gold valuation services to make the most of any possessions that can be put forward as collateral for a loan.

Financial Management


In all these cases, however, you’ll have to decide whether a short term financial boost is really needed, and whether you’ll be incurring further debts after spending beyond your means at Christmas. The New Year should also represent an opportunity to start putting aside money for the rest of the year, and to target financial independence through savings and paying off existing debts; this can be achieved by making use of tax free savings accounts like ISAs, by seeking financial advice from credit unions, and by downloading personal finance apps that will help you to balance your short and long term budgets.



About the Author:
Patrick Hegarty has been supporting his family on a low income for many years. He has found selling his unwanted items a great way to supplement his income. He can be found blogging about different subjects from balancing finances to family life.


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