Struggling with Holiday Debt?
For many families in America, the holidays can be a very expensive time. Between gifts, decorations, food and drink, parties, and travel, the unexpected costs can quickly rack up. This may be way consumer credit agencies report that the number of people they see reaching out to them for help jumps 25% during January and February. Are you worried about credit card debt after the holidays? Keep reading for our advice in avoiding or dealing with holiday debt.
Top Tips for Avoiding or Dealing with Holiday Debt
Here are the best ways to protect your bank account before and after the holiday season:
• Make a budget, and stick with it. Before the holidays begin, it’s time to sit down and make a budget. Include everything. Food expenses may include special dishes and ingredients for dinner parties you host as well as wine and hostess gifts. Travel expenses include hotels, plane tickets, gas, and vehicle maintenance such as getting your tires rotated and your car’s oil changed. Set a budget for gifts, as well.
• Make a plan for paying off your credit card. Are you using a credit card to buy things during the holidays? Obviously paying with cash is better, but if you are using a credit card, make sure to plan a way to get the balance paid in 30 days or 60 days. Definitely do not plan for a longer payment plan than 90 days.
• Look for ways to cut costs. Make frugality your New Year’s resolution! Look for creative ways to save money and to cut spending. Prior to the holidays, you can save money by making gifts instead of purchasing them, or arranging with your family to do an alternative gift giving option such as “Secret Santa.” Or if you are traveling you can ask your family to make your plane ticket your gift; this way you’ll be saving money and seeing your family worry-free instead of getting lots of material things. Above all, remind yourself what the season is really about: Love and kindness expressed from your heart, not materialism or how much money you spend.
• Save for next year. You can use your spending this habits this year to proactively address next year’s spending and to plan for more reasonable choices. You can even set aside a special savings account and put a little into it each month to prepare for the next holiday.
• Pay off debt smartly. Just remember the “snowball method”—an easy theme during the winter season! Pay off the most money that your budget can manage against the debt that has the highest interest rate attach. At the same time, pay the minimums on the other debts. After you have paid off the debt with the highest interest rate, focus on paying off the debt with the next highest interest rate—while still keeping up with the minimums on the other debts—until it is gone. Continue down the line.
For more advice or a free consultation regarding your debt relief options, call the Worthington bankruptcy attorneys at Wood & Brewer, LLC. We’re here to help you examine your options and take the best next step. Call 614-396-7280 to take the first step.