How to successfully conquer holiday debt | Reed Law Firm, P.A.

How to successfully conquer holiday debt

On Behalf of | Nov 27, 2020 | Bankruptcy, Credit Card Debt |

Every year, most Americans anticipate spending hundreds of dollars on gifts, celebrations and food during the holiday season. However, 2020 will be the biggest year for holiday spending as sales grow rapidly for the holidays.

According to a survey from Magnify Money, the average person racks up $1,325 throughout November and December. And they won’t be able to pay off those debts by the end of January.

What does that mean for me?

While holiday debt is serious, it doesn’t mean you can’t indulge in some spending this year. What you need to do is follow some simple strategies to keep spending manageable, including:

  • Understand your limits – Analyze your financial situation before setting a budget for your friends and family members. If you know you want to stay within a certain spending limit, communicate that and stick to it when it comes to buying gifts.
  • Reduce your debt strategically – You need to find a plan that works for repaying all your credit card debt. For example, pay off your highest interest card and then eliminate those bills quickly. Also, use a calendar to ensure you’re paying on time for any credit card bills.
  • Know what you want and the best time to buy – Most people depend on Black Friday deals to save them major coin during the holiday season. However, it’s not always true. Many people tend to overspend on Black Friday and pay more for useless products. What you should do instead is develop a shopping list for each gift you need and a precise time when the price is the lowest.
  • Spread out your spending – Do not buy all your gifts at once. Slowly accumulate your gifts over multiple paychecks to keep the balance on your credit card low and still gather the gifts you need for everyone in your life.

If these strategies do not work for you, you may have more serious financial woes to address. And that’s ok. Do not be afraid of debt because there are always options to address unruly bills, such as bankruptcy or debt relief tactics.