« Fair Credit Billing Act | Main | Give the Gift of Proper Coverage »
November 28, 2006
Watch Your Budget - Christmas is Coming
With the holiday shopping season well under way it is crucial for year round financial success that you keep a close eye on your budget.
Keep in mind the holidays should not be about "out gifting friends and family", the holidays are about spending time and enjoying the people that are important to you.
There is always the temptation to throw caution to the wind and spend up a storm.
It is far to easy to max out your credit cards at this time of year but remember that your free wheeling holiday shopping frenzy will result in a January credit card bill.
Did you know that January is the highest month for banks issuing debt consolidation loans?
It's true. Because of uncontrolled spending on credit cards during the holidays, consumers are faced with problems of paying minimum payments on bills in the new year and the only option to make ends meet is to take out a debt consolidation loan to allow for making minimum payments.
This can be the beginning of what may result in bankruptcy.
Here is how the scenario plays out:
1. Credit cards are maxed out during the holidays
2. January bills come in
3. You realize you can't make it
4. You call the bank to come up with a solution
5. The bank offers you a debt consolidation loan
6. You pay off your credit card debt and other bills with the consolidation loan
7. You breathe a brief sigh of relief because you feel you can now make it
The problem with this:
Now your credit card debt is rolled under a consoldiation loan which sometimes includes your mortgage.
You feel good because you have one easy to make payment.
But...
You still have that credit card in your wallet. Something comes up. Maybe a car repair.
You pay for your vehicle repair on your credit card and the story starts all over. You can't pay off the credit card balance and more stuff happens, your credit card bill rises until next year's holiday season and BANG, your financial ruined.
Moral of the story:
You don't need to buy lots of stuff during the holiday season.
Simply enjoy those around you to live a debt free life through the rest of the year.
Trackback Pings
TrackBack URL for this entry:
http://www.crediteria.com/cgi-bin/mt/mt-t.cgi/143