Dealing with Debt

Debt is not a good word, right? And, unfortunately, this time of year brings the ugliest of the debt conversations and thoughts. During the 2016 holiday season, 24% of shoppers spent more than their budget and another 27% did not even have a budget. In 2017, those percentages are expected to increase. Where are we going wrong during this season, and how can we prevent excess debt at the end of the year? (So glad you asked!)

1. Start planning now for next year.
Open up a savings account JUST for Christmas. Ask your financial institution if they have any accounts specifically for Christmas that will give an incentive to keep the money in the account throughout the year.

2. Make a list, and check it twice.
You can’t expect to stick to a budget if you never had one to begin with. Before the season started, I wrote down each person that I needed to get a gift for. Then, I put an amount that I hoped to spend on each person. I compared that total number with the amount budgeted and had to adjust some numbers to make sure the totals matched. It has helped me tremendously with knowing how much each gift should cost.

3. Look for low interest.
If you absolutely need to borrow some money, look for lower interest rates so paying back debt after Christmas is not so painful. Credit cards will rack up interest over 20%! Make it a goal to not go over a 10% interest rate for your holiday purchases.

4. Sell a few things you aren’t using.  
Do you have a Wii sitting in your basement? Or, is there a recliner that is not getting used? Not only do we all need a few extra dollars during this season, but we also are all looking for a deal. This is the perfect time to sell gently-used electronics, furniture, jewelry, appliances, or clothes. It’s a buyer’s and seller’s market!
 
Try to get to January 1 with little to no debt from the holiday’s this year. If that plan is already ruined, how can you plan for December in 2018 better than you did in 2017? Make sure to follow us on Facebook to find out how we are planning to have an even better 2018!