Guidelines to deal with holiday and seasonal debts
While the Christmas season brings in the celebration fever, it is after you receive the bills that you start worrying about your debts. You now need to start coughing up money to pay the bills. This may not be possible immediately and then you start thinking ….how come I did not think about this before spending. right? well, yu are not the only one facing this self-invited calamity. Most of us forget to spend within means and usually end up cribbing about the ever increasing expenses.
According to a recent survey by SpendingPulse, Americans spent eight percent more during the 2004 holidays than the year before. Most of those purchases were made via the power of the plastic card. Visa USA has even announced that credit card holders were able to spend more than thirty billion up till the Christmas week. Now that is a huge amount. It clearly exlains how the american population’s dependance on te credit card is increasing every day.
Some of the other findings suggest that the average family in America had almost ten thousand dollars in credit card charges for last year and up until Christmas of this year – as they are purchasing items - they are still paying debts incurred a year ago. Christmas has indeed been a taxing affair for these families if they are still paying their dues for teh previous year. How about Christmas this year then? Are they not going to celebrate? well ofcourse they are. They will borrow again… and again. And then they will be in huge debts taht they cannot afford to pay back again.
Iis there a way to avoid such scenario? Simple. Take control of your expenses and put a halt on using that credit card. Remember, the credit card was buil to provide momentary relief through small borrowings. So keep it to those levels. Thsi will come only through self discipline.
Let usu take a look at some tips to avoid going overboard in debt. This will also help suggest how to cope with debt that is already incurred.
To begin with, start planning your life ahead. Take a look at every expense and source of income and see how it fits in today and how you can change that to benefit tommorrow. When it comes to holidays or Christmas, plan in advance how much money you will require and start saving accordingly. Rather than using the credit card and thinking about ways to pay after spending, do th eother way around. This helps.
As arule, take whatever you spent for the current year and divide it all by ten. That amount will have to be put aside each month. Store it in an account, preferably a money market. That way, by October the following year, you are on your way to a debt-free holiday. Since you already have th emoney, you will also learn to limit your expense to that budget automatically. Remember to include in your expense list any items incurred during Christmas especially items like postage, decorations, mail, foods, drinks, cards, photos, etc.
Don’t cheat your conscience, Be honest with yourself
- Take a good look at your expenses and realistically asnwer the following questions:
- Have you spent too much this Christmas?
- How are you going to create the money to pay for the dues?
- Have you started planning for the next Christmas?
- Have you set aside the monthly sum for this saving?
- Will there be guests during next Christmas? Do you need more money to etertain them?
Be wise in your decisions. If you cannot afford to pay, it is better to stay away from spending rather than going deep in debt. You certainly want to enjoy Christmas rather than fearing the aftermath it causes on your bills. Assess your situation, if more than twenty percent of your salary is used to pay off debts, you need to have help.
Make it a rule to pay off everything before the new year comes. Stop using your credit card when you think you may find it difficult to pay back. Start planning in this direction and believe me, you will be able to enjoy every moment of your Christmas celebration.
Article by Nakagava Ltd., creator of PiggyBob™, the first truly user friendly personal finance and appointment scheduling software. PiggyBob™ is an extremely convenient tool to help you keep track of your income and expenses, plus a very useful printable calendar to record all important events in your life. Downloand now
