Christmas Credit Hangover
It happens every year. We carefully set a budget for Christmas gifts, then more guests come, or you have to reciprocate for someone not on your list, or the store is sold out and you have to scramble to find a substitute, costlier gift.
Then the Visa and Mastercard statements start to arrive and the post-Christmas spending hangover arrives. One person recently told me their debts were so high that they tried to return the gifts they received so they could get some cash to pay for the gifts they gave others. (You would probably only get store credit, so unless you are saving cash by spending the credits, keep your gifts.)
So now you have a credit card situation. Open all the bills, allow yourself a few minutes of woe-is-me, and then get to work.
Make a list of all of your debts, including
1. Creditor’s name
2. Amount owing
3. Interest rate on debt
4. Minimum monthly payment required
Now comes the hard part. Prepare a budget for yourself showing your monthly family income and living expenses.
List all your living expenses as if they were being paid in cash, as you are trying to pay down your credit cards, not add more debt to them. As part of the budget you must allow for the total of the minimum monthly payments to be shown as a cash payment. If you have any cash still available go back to the list of the debts and pay the debts with the highest interest rate first. If you are only able to pay the minimum monthly payments, or if you cannot manage even that, you might need help from a professional financial or credit counsellor.
Most counsellors offer a free 30 minute review of your situation to help you decide what is right for you– take advantage of this – make the call.
While you are feeling motivated, make a note in your summer or fall calendar to have an honest chat with your family and friends about cutting down the cost of gifts for the next holiday season. They may be thrilled that someone took the first step to reduce the costs for everyone.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.