Did you know it takes the average consumer a little over two years to pay off debt that they incurred during the Christmas holiday? And that is just Christmas debt. What about the bills you had before the holiday season began? There has to be a way out of this vicious, spending frenzy that occurs every December. So, before your go out and spend money that you do not have, we have a few pre-holiday tips.
For starters: pay your December bills before you purchase any gifts. If you are one of those consumers whose mindset is to pay December’s bills with the January bills, we are talking to you. It is time that we as consumers change our thought process when it comes to our bill paying habits. We know you may not have a lot of money to purchase Christmas gifts if you pay your bills first. Do not panic, this is indication that you are not in control of your finances. Not to worry, all is not lost. You can be in control of your finances, you can start by paying your December 2008 bills when they are due. It is that simple. It makes no sense trying to keep up with Joneses, they are probably in more debt than you are. Just keeping it real.
Secondly, whatever happened to the days when fathers said, “I’m the big Cheese around here and what I say, goes. And whatever happened to the mothers who use to say, “Cause I said so.” Let’s bring those fathers and mothers back and teach our children a thing or two about spending. We have become consumers/parents who go deep into debt for children who are bringing home mediocre grades. Let’s be honest, some of our children are bringing home downright ugly grades. And these are the kids with a ga-zillion gifts under the tree. What is wrong with this picture? The school marking period in Syracuse ended November 15th. Look at your children’s grades, are those grades worth going into Christmas debt? Debt that will probably take over two years for you to pay off. Be honest with yourself.
Can you remember the gifts that you received last year? Can your children remember the gifts that they received last year? If so, where are the gifts from last year? In the back of the closet? And more importantly, are you still paying down Christmas debt from the previous year? If you are, we are talking to you. Starting in January (December, if you are smart) get yourself a Christmas club account for next year. During the Thanksgiving and Christmas holidays we also have to contend with purchasing more groceries. Holiday grocery spending can add an additional $400 – $600 to our food bill. Let’s not forget the all-seafood menu that many of us enjoy on New Year’s day. That alone can set a budget back another $300.00. Your 2009 Christmas Club money can help with food as well as gifts. Be smart, start socking some cash into a Christmas Club account.
As consumers living in Syracuse, we also have to keep in mind that winter in this area brings other expenses such as higher than normal heating bills. If you charged Christmas on your credit cards, not only will those holiday bills be due in January, so will your gas and electric bill. Do not be fooled into thinking that your utilities cannot be shut off in the winter. The local utility company is required to give you a 72-hour notice (that is 3 business days) before they can shut your electric/gas service off in the winter. The Public Service Commission requires the local gas/electric company to give 72-hour notices from November 15 – April 15th. Having your utilities shut off during the winter months is no picnic. If there is a chance that you may forego paying your electric bill to purchase a gift or two, it just is not worth it. Just keeping it real.
We understand that it is easy to get caught up in the holiday merriment. Advertisers are enticing us on television, on the radio, billboards, everywhere. The malls are decorated beautifully, all to get us to spend, spend, spend. Merchants invest big bucks to get your dollars. When the new year arrives and you miss a payment, those same merchants (who pulled out all of the stops to get you to purchase from them) start calling you at home and on the job, asking when can they expect payment. Did you know they like it when you miss a payment? Yes, that is how they make their money. Because you missed a payment, they can raise your interest rate, charge you over the limit fees, etc. That is how they make their money. They don’t really want your monthly payment to come in on time. If you pay your bills on time, merchants and retailers benefit, but not as much as when you miss a payment or pay late. They make more when you pay late. Keep that in mind when you get sentimental while Christmas shopping.
It is not our intent to sound like Scrooge. It’s time for Syracuse to get off the debt roller coaster. If sounding like Scrooge is going to help you, call us Scrooge and we will respond with a ‘Bah Humbug.’ Although this holiday season may entice you spend more than you can afford, discipline is the key to helping you manage your purchases. Do not get taken in by those 60% off deals or those ‘no interest until 2012’ deals. Do not get tempted by liquidation sales. Liquidators are in business to make money, they are not giving you a deal, liquidating is what they do. Do not be fooled. That flat screen television that you purchased at the liquidation sale for $1199.00, you could have purchased it at Walmart or BJ’s for $799.00. And BJ’s and Walmart would have given you a warranty. Liquidators do not accept returns nor do they give warranties. Don’t get mad, we’re just keeping it real.
Make yourself a Christmas shopping list. Santa checks his list twice – go Santa one better and check your list three times. Do you really want to buy gifts for everyone on your list? It is alright if you want to splurge on everyone, it just an indication that you care. Remember, what you are feeling is the hype of the season, trust us, it will go away on December 26th.
Get creative in your gift giving this year: take a picture of the person you want to give a gift to. Now, go to the Dollar Store and purchase a nice silver picture frame. Now go to Macy’s and get a nice gift box. Need we say more? Get unconventional in your gift giving: do you have someone on your gift giving list who loves their car more than they love air? Purchase a car wash gift certificate or two for them. It truly is not the amount of the gift that counts, it is the thought that counts. Do you have a few women on your gift giving list? Forever 21 has beautiful multi-colored scarves for $9.80. Go back to Macy’s and get a few more boxes, throw a scarf in each box. No one has to know you spent $9.80 on them. Do you have a niece who would love a fancy hair style but a fancy hairdo is not in the family budget? An appointment at a hair salon makes a nice, affordable gift. Do you have a nephew who needs driving lessons? A gift certificate from a local driving school makes an ideal gift. Do you have an elderly aunt or uncle (on a fixed income) who needs an oil change or a car tune up.
A gift certificate for an oil change or a tune up makes a nice, inexpensive gift. Be sure to check the newspaper for a coupon. You can even purchase his and her pedicure gift certificates – young and not so young couples would appreciate and enjoy this type of gift. There are ways to shop for Christmas without breaking the bank and going into debt.
Lastly, please keep in mind when you use your credit card, you are simply borrowing from your future income. When you use your debit card to purchase a Christmas gift, ask yourself what bill will not get paid because of that debit card purchase. You know your finances better that anyone else. Be honest with yourself, can you really afford it? Break the cycle of spending money that you know you do not have. If you are saying to yourself, ‘That’s why I work everyday, to buy nice things for myself’ we are talking to you.
Be sure to tune into James and Barbara Peterson’s weekly radio broadcast, ‘Improving Your Credit Worthiness’ on WSIV 1540 AM every Wednesday 2:00 -2:30pm. To schedule a workshop or seminar for your group, church, community center or business please call 315-446-4668 or email: email@example.com