We all have a vision of what constitutes “the perfect holiday.” For many of us, it means countless presents under the tree, our children’s smiling faces on Christmas morning and that perfect meal with our family and loved ones all gathered around the table. For some of us, making that vision a reality means putting it on credit cards.
If that was you this year, you’re probably wondering the next steps to take before the bills arrive and the interest starts mounting.
Here are some immediate steps you can take to help manage holiday debt in the New Year:
Make January and February lean months for spending. With the plentiful holiday season behind us, it’s a good idea to start reeling in the spending and extravagance. That doesn’t mean starve yourself, but it does mean sacrificing on splurges you would normally enjoy (i.e. – dinners out, visits to the salon, shopping, vacations, etc.)
Channel savings directly into those big credit card payments. Take a look at all of your credit card bills and determine which one has the highest interest rate. Make the biggest payment you possibly can afford towards that card, while still allotting enough money to pay your other bills and cover monthly expenses.
Look for zero-interest balance transfers. BEFORE you send off that big payment, research credit card offers for balance transfers that allow you to pay 0 percent interest on the transferred balance for a certain period of time. Just make sure you get the transferred balance paid off before the zero interest offer expires.
Sell unwanted items. You will likely find that after the dust settles, you have some unwanted items and gifts around the house you no longer use or want. Utilize Craigslist and eBay to sell these items and earn some extra cash. This money can go towards making bigger payments towards your high-interest credit cards.
Start a savings plan for next holiday season. The best time to start saving for the next holiday season is right now! If you save just $10 a week (the equivalent of a lunch out or a week’s worth of Starbucks runs) for 50 weeks, you will have more than $500 saved for next year’s shopping. If you save $20 a week, you will have over $1,000 set aside for holiday shopping next year. The easiest and most effective way to do this is by setting up weekly automatic transfers through your bank.
Make the holidays more realistic. Discuss sensible downsizing when it comes to purchasing gifts next year. Have a budget for gifts and stick to it. Move to drawing names with family members for gift giving purposes (i.e. – Secret Santa) and discuss arrangements that reduce the challenges on travel for everyone. The spirit of the holiday season should be about togetherness and giving thanks for all of the blessings we have- not something that causes you to go into debt.
If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.