Holiday spending expectations up slightly

With Christmas right around the corner, many consumers are probably scrambling to finish last-minute holiday shopping. According to Gallup, spending expectations are up slightly from November, reaching $740 in early December, compared to $704 a month earlier. This is much lower than totals seen in 2007 and 2008, but a good improvement from 2010, when consumers only spent an average of $638 during the holidays.

During this time of year, people tend to overextend themselves, which can lead to future financial troubles. Should someone face an unexpected expense following the holidays, they may have difficulty covering all the monthly essentials. For example, a car breaking down after the holidays could be troubling if it leads to an expensive repair. If people are unable to come up with the funds to pay for their bills, they may incur costly late fees and penalties, which could create additional financial problems.

However, that doesn't have to be the case, as short term lending could provide funds quickly to make it possible for consumers to cover all bills. Many avoid this type of financing due to the stigma, but these people should consider the full picture.

Critics of short term loans say they come with high fees and interest rates. But, missing a payment on a bill can lead to late fees and rate hikes. So, consumers need to consider both costs to see if this type of loan could prove beneficial. If the fees and interest charged is less than what would be incurred if a bill payment is missed, people may want to consider short term lending.