As you wrap up your holiday shopping, I know that many of you will find yourselves incurring some holiday debt. Although I encourage everyone I know to pay for their holiday purchases with cash, I also know that not everyone is in a position to do that. Things happen sometimes, and we all do what we have to do.
Now that you’ve created this holiday debt, there’s no point in beating yourself up over it. What you should do, though, is take the time to make a plan now for paying that debt off. Don’t let it hang around for months and months. If you are aggressive about getting rid of it, you can retire that debt in time to start saving for next year’s holiday shopping.
Get a final total. As soon as your holiday spending is finished, you should take inventory to determine exactly how much debt you’ve incurred. This total will help you decide how much you need to pay each month in order to get rid of your debt within a few months.
Make a commitment to pay a specific amount toward your holiday debt each month. Some people plan to pay off their holiday debt right away, but don’t make any concrete plans. They just plan to pay “as much as they can.” The problem with that plan is that there will always be something else that needs your attention besides your debt. You should decide right now how much you can afford to pay each month and commit to paying it.
Send any extra money toward that debt, too. Maybe you can work extra hours to get some extra money. Perhaps you will sell something to pull some extra cash together. There are many different ways to stockpile extra money to pay down your debt. Paying more than your committed payment toward your holiday debt will make it melt away with the winter snow.
Keep making those payments once your debt is paid off. Don’t take the pressure off once you’ve gotten rid of the debt. If you keep making payments (but directing them to your savings account), you will build a nice little fund to use to pay for next year’s holiday expenses. Now holiday debt will be gone from your life forever.
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{ 3 comments… read them below or add one }
While making a plan now is great, if you haven’t made one yet, I think you’re doing yourself a disservice.
I think the time for planning for holiday spending comes before all the trips to the stores.
A budget needs to be made (and stuck to) before we go shopping, to give us a compass.
And the plan to pay it off needs to be at least contemplated then. Oh by the way, it should also factor into how big your budget is.
Don’t make your budget inordinately larger than what you can pay off.
Great post
They are really good suggestions and something that we should all do. I have always tried to be good around christmas but this year has been especially hard and imagine a lot of people are probably feeling the same pressure I have definitely tried to cut down on my spending and think that with tips like this and other money making ideas I will just scrape through this christmas.
This is so true. Once the holidays are over and you realize how much you spent that you really couldn’t afford to spend, it’s hard not to get really down about it. But making a plan to get rid of that holiday debt gives you a goal and gets you on the right path.