The time is here once again: Christmas, anxious to rob you of the few bucks you managed to save after paying off last year’s coffee and ginger bread-fueled shopping sprees!
A financial survey of over 400 Americans last year, conducted by Magnify Money, showed over half that number of people planned to take 5 months or more to pay off the debts accumulated during the holidays (ie., gifts, parties, transportation costs, dining out, etc.) Some even said they’d make the minimum payment every month and pay interest until that debt was paid off in a few years. The average holiday debt accumulated in that same poll was almost $1000 — and that’s an average! Just imagine how much some of those people ended up owing.
This report from Credit Donkey shows several people will be haunted by their Christmas debt for the next 4 years!
This is getting out of hand folks. You have to reel in your spending this year so you can actually enjoy your New Year’s celebration rather than dreading the impending doom waiting for you on your end of January bank statements.
Here are 5 tips to help you make next year less of a financial crisis than you may have faced throughout 2016:
1. Use credit ONLY if you can pay it off before any interest is charged.
Whether your interest free period is 20, 24, or 30 days, you can’t just spend willy-nilly and worry about it once the bill comes due. This is how people get themselves into trouble: spending with reckless abandon and Devil-may-care. Know how much you’re spending and double check that you’ll be able to pay it off with cash before it starts costing you.
2. Retired folk can’t afford debt.
It might be tempting to give the grand kids anything and everything they want for Christmas this year. If you have spare cash on hand and it won’t hurt your bottom line, go for it! If you’re retired and have to go into debt to be a “granny” or “grandpa Claus” you best think real long and hard before tapping that card. Any smart financial planner or expert will tell you that retirement is the time to cut up your cards and never use them again, regardless the occasion.
3. From a financial health standpoint, the holidays are just like the rest of the year.
Don’t treat your bank account or credit cards like they’re Monopoly money just because it’s the holidays. We all get trapped into this mind set at least a few times throughout life. The big problem is when you’re spending so much on everyone else, we all subconsciously get trapped into the desire to treat ourselves at the same time. This kind of recklessness can snowball out of control quickly and leave you struggling come January, and last well into June (if you’re lucky!) If you’re planning to spend big this holiday rush, you should have already saved that money leading up to now.
