Archive for Thursday, December 10, 2009

Deterring debt

December 10, 2009

Q: For those dealing with debt, what are some tips for not overspending during the holidays?

A: It is important to set a budget for each loved one you want to buy for, and actually stick to it. For some people on your list, they may be struggling themselves as well, and it is possible to casually bring up not exchanging gifts. Instead, get together for dinner and share some time together.

Q: What are some budget strategies that can be used during holiday?

A: Other than sticking to your set budget, remember that it’s OK to scale down, and always watch the sale ads. Retailers know unemployment is high, and many families are careful with every dollar, so they have to attempt to lure you in. For those with a talent for crafts, quality homemade gifts are always appreciated. If you think you might be overspending, you probably are.

Q: Should a person in debt still spend money during the holidays?

A: I think in our society it’s nearly impossible to cut out gifts altogether. There are often people you can take off your list, but for others, you just need to try to make wise decision when selecting gifts.

Q: What are some common areas people could cut from their budget to afford holiday shopping?

A: Nearly everyone has their regular income, and their predictable monthly bills. During the holiday, the bills rack up higher than a typical month and it’s hard to find money for everything. Places to cut your regular budget are entertainment such as eating out, movies and concerts, and recreation such as vacations, watercrafts, ATVs or motorcycles.

Q: What steps should someone in debt take following the holidays?

A: List your debt from the highest interest to the lowest. Concentrate first on the highest, and work to eliminate it, while making minimum payments on the others. Once you’ve taken care of one, work toward the next on the list. In the meantime, only live within your means. Don’t keep adding to the bottom of the list. For store cards that tempted you with six months, 12 months, with no interest, watch the end date on those promotions closely.

Comments

66061 4 years, 11 months ago

"Deterring debt!" According to whom? Just who is providing these answers?

I would recommend you attack your lowest debt and then your next lowest debt. As you pay off each debt you build momentum. It is a very positive feeling of accomplishment. Dave Ramsey, author of The Total Money Makeover "preaches" this approach. He refers to it as a "debt snowball." It worked for me. I am now debt free.

If you don't change your spending habits you will find yourself right back where you started. Do a budget and watch were your money goes. That will tell you where you can cut back your frivolous spending.

Use only cash for your Christmas shopping. It hurts to take the cash out of your pocket and give it to the cashier. However, the use of credit cards, for the same purpose, will really hurt come the January bill.

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