Handling the Hangover of Holiday Overspending
For Immediate Release - 12/28/2005
Just a few days ago, Delawareans were eagerly opening their mailboxes in anticipation of receiving holiday greetings. Now that the holidays have past, some may be anxious about opening that same mailbox -- being nervous to see just how much they actually spent over the holidays. State Treasurer Jack Markell has some words of support for Delawareans who are finding themselves fending off holiday spending hangovers by recovering with some financial planning.
"Hoping that the bills won't come in or that somehow they will manage to be paid off over time can be risky. Depending on how much you owe, you could still be in the exact same boat next January," Mr. Markell said. "If you're starting the New Year off in debt from holiday overspending, don't panic. Instead, start planning now."
Markell offers the following steps to help you and your budget to get back on track:
Calculate the Damage.
The first thing you will need to do is collect your receipts or call your credit card companies to find out exactly how much you owe. Once you know how much you owe, you'll be able to start to plan to pay off this holiday debt as quickly as possible. Waiting for the bills to arrive could put you even further behind, and you'll lose valuable planning time.
Prepare the Plan.
Create a simple chart by writing down the balance owed on each card and the minimum payment due (and due date), and plan to make at least the minimum payment on each card, and more if possible. Credit bureaus like to see that you'll pay something more than the minimum due.
Consider Temporary Budget Cuts.
Unless the budget was totally decimated over the holidays, you should be able to regain control relatively quickly. Plan to make cut backs over the coming weeks, months, or however long it may take to get caught up. Make a list of everything that you spend money on each week and see where you can make cuts. Those frivolous purchases really add up. Identify leaks in your budget and stop them.
Stick to the Plan.
Pay off your holiday debt as quickly as possible. Make the payments, and make them on time. Paying late will only add to the problem by adding finance charges and late fees. If you simply cannot pay even the minimum due, call your creditors quickly. It's better to inform them that you can't pay than to not pay and get even further behind. Let them know that you want to pay and see if they'll work with you to set up a payment plan.
Organize for Next Year's Holidays.
The holidays come around every year, so instead of playing catch-up, why not create a holiday shopping fund for next year? After you catch-up this year, devise a plan, lists and budget for next year's holiday spending. Base your budget on this year's spending, and try to set aside money each month so you won't need to go into debt again after you've worked so hard to get out.
Become more Financially Literate.
To better understand your money and make it work for you, visit the Delaware Money School at www.delawaremoneyschool.com or call 800/267-5002 for a schedule of free financially-themed classes that are offered statewide year round. Some upcoming offerings include "Kiss Debt Goodbye and Other Credit Tips," "Budget Building" and "Money Smarts for Kids and Their Parents".
