When it comes to festive season shopping, here are three things you should never do.
Debt is a symptom of the bigger problem: Overspending. Don’t bargain on a raise next year or winning the Lotto as a means to pay back all debt you made during the Summer.
If you find yourself in trouble, the best advice we have for you is to discuss your debt situation with your creditors. Tell them you are having a problem and ask them what alternatives they can offer you. Don’t be afraid to talk to them, you are a customer and therefore you are very important to them. Yes you have a problem right now but they know you can recover and they want to keep you as a customer for many years to come.
You set up a budget for the festive season, now stick to it! Have you ever heard the saying: “A moment on the lips is a lifetime on the hips”? That is true of any diet, and your debt diet is no different. That little cheat – a chocolate bar or breaking your budget – might feel good now, but you will regret it later. You also want to avoid penalties because of late or non-payments.
While your budget should be only for minimum expenses, don’t make the mistake and not have an amount available for emergencies, especially at this time of the year. There are always expenses you don’t plan for and you should make sure you make a plan for all of those unexpected events. Keep 10% to one side in case of a medical or other emergency and save it. And if you haven’t used it after a few months, you can use it to pay into one of your accounts. And remember, buying a new pair of shoes or a dress for the Christmas party is NOT an emergency!
You should always avoid making more debt to pay back your other loans. Having a borrowing-from-Peter-to-pay-Paul attitude won’t work at all! The more money you owe, the further down the debt spiral you go.
Click here for tips on how to deal with holiday debt