Festive Period Debt
Debt is often described in negative terms. But borrowing money, or ‘taking on debt’, isn’t necessarily a bad thing. Manageable debts, that you can comfortably pay back over an agreed period, are often necessary in order to take that next step in life.
It’s only when debt repayments become unmanageable or unaffordable that debt becomes a problem.
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Ways to avoid christmas debt
“It was the best of times. It was the worst of times.” While Dickens’ classic opening to “A Tale of Two Cities” may have had nothing to do with the holidays, it’s a fine description of them nonetheless. Because while the festive period can be wonderfully joyful, it can also be financially difficult. But it doesn’t have to be so. The fact is, there are ways to experience the best without bringing on the worst by running up unnecessary debt.
Ways to Avoid Christmas Debt
During the holidays many people simply put the blinkers on and pull the credit cards out. They don’t want to think about the bills that will be arriving in January. But they should; for their sake and their family’s sake. If they don’t, they run the risk that in January – when the Christmas debt chickens come home to roost – they will suffer buyer’s remorse and the loved one that received an extravagant gift will suffer receiver’s guilt.
With that in mind the best way to avoid running up debt during the festive period is to firstly make sure all the priority bills such as your mortgage, electricity, council tax and phone have been taken care of. Neglecting essential expenses for the sake of discretionary purchases is a recipe for disaster down the road.
Once you have taken care of essential expenditures you can think about holiday spending. To ensure you do so in a way that won’t come back to haunt you follow these simple steps:
- Set a Budget and Stick to it – No “buts.” Subtract your core expenses from your likely income. What remains is money for discretionary spending. Make sure any holiday expenditures do not exceed this amount. That includes future credit card payments.
- Plan Ahead – Save a Little Each Month to Give You a Buffer for Extra Spending – This one of the smartest things you can do to ensure a joyful festive season. The less you have to find during the holidays the better off you will be.
- Purchase Gifts Throughout the Year and Spread the Cost – If you see the perfect holiday gift on sale in July and you can afford it, don’t hesitate. No one will know or care when you actually bought it.
- Keep Track of Spending Over the Festive Period – Keep a running ledger of expenses and compare it constantly to your budget. If you find yourself exceeding your budget put on the brakes. Everyone will thank you later.
- Avoid Accruing Hidden Expenses – Keep an eye on your bank balance and credit limit to make sure you don’t face any penalties, overdraft charges or interest. Hidden expenses can be a budget killer.
In order to avoid going into unnecessary Christmas debt you might also consider having a garage sale. This way you can clear your house of items you no longer use and earn holiday spending money in the process. You might also consider taking on a seasonal job. Another option is the Christmas loan, although you need to be sure you’ll be able to repay such a loan completely within the often short time frame allotted or you could find yourself in hot water.
At the end of the day, should you overspend on the holidays and require Christmas debt help there are many counselling agencies out there who can and will provide you free, helpful advice on how to bring your situation under control in the least painful manner possible. Just keep in mind that the best course of action is not to overspend to begin with.
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