By Meghan Northcutt, AFC® Candidate, FFC Candidate
The holidays have ended. If they were anything like mine, it was not the picturesque scenes from the magazines. You imagined a perfectly cooked ham, gifts with beautiful bows abundantly encircling the Christmas tree, and faces with grins from ear to ear. What you actually got was a slightly overcooked turkey, gifts in crumpled boxes after the cat decided it was the perfect place to nap, and faces with big smiles accompanied by some tears when it was discovered that Santa Claus didn’t bring batteries for their new favorite toy. Still you take a deep breath, kick your feet up for a minute, and relax after declaring the holiday season a success.
You blink and what to your wondering eyes should appear but a stack of bills to commemorate the end of the joyous season of giving and gifting!
You take another deep breath and think, “Where in the world did I spend all of that?”
This is a typical thought when considering that 62% of parents say they spent more than they should on gifts during the holiday season. Then, consider that the average spent on cards and postage is nearly $33 and the average spent on travel is $960. The dollars spent during the holiday season add up very quickly and often go unnoticed until the credit card bills start pouring in.
Step 1: Do not panic! Decide that instead of being overwhelmed, you are going to create an action plan.
Step 2: Review all of your statements to confirm that all of the charges are correct. Identity theft is on the rise. It’s better to confirm spending rather than assume it’s correct and pay for someone else’s decisions.
Step 3: Create a list of your holiday debts. Who do you owe? How much do you owe? What is the monthly payment? What is the interest rate?
Step 4: Prepare a budget and plan how you will overcome additional spending temptation. If ridding yourself of holiday debt is the goal, it’s important to reduce spending.
Step 5: Figure out which debt you will target for pay-down first.
Step 6: Call your credit card company to inquire about lowering the interest rate.
Step 7: Once the debt is paid off, begin a holiday savings fund to prevent seasonal debt in the future.
For Assistance in Steps 1-7: Make an appointment to meet with a Financial Counselor on your installation or call Military OneSource.