Holidays
Spending big on the holidays? Forget it!
The Detroit News
Saturday, March 1, 2008
Being a Florida gal, my long-suffering wife, Mrs. Money & Life, is unaccustomed to living here in snowy Michigan.
Lately, she was mystified when our school district canceled classes for the four-jillionth day in a row, to protect the buses from the dire threat of "freezing dew."
"I thought people here knew how to handle winter!" she huffed. "How else could you live in a state shaped exactly like a mitten?"
What really had my money honey cranky was facing another day cooped up with my boy, Li'l Money, and his drum set -- that she bought him.
Debt sticks with you
While that's one Christmas present she won't soon forget, it turns out that most Yuletide gifts aren't nearly that memorable. According to survey by the online survey firm Zoomerang, 41 percent of us can't recall the best holiday gift we received last year.
This gift-getting amnesia comes at quite a price: In December, American holiday shoppers racked up $2.1 billion in new debt, according to CardTrak.com. And while the presents may be forgotten, all that debt comes with a nasty monthly reminder in the form of credit card bills.
So what do you do if you rang in the holidays with "Jingle Bells," but now find that you're juggling bills?
First, you're not alone. Consolidated Credit Counseling Services estimates that one-third of consumers carry over holiday debt from year to year. That's the gift that keeps on giving if by "giving" you mean "draining my bank account, cheating my retirement fund and making my financial goals a cruel, mocking joke."
Remember to save
Which brings us directly to the second point -- the basic holiday debt payoff drill:
• Stop charging new stuff or absolutely vow to pay off all new charges every month.
• Start saving for this year's holiday now. You've got nine months, so add up or estimate last year's gift budget, plus decorations, party supplies, etc., divide by 9 and deposit that sum every month in a separate account.
• Keep paying your current monthly minimum payment (somewhere between 2 percent and 4 percent of your balance), even when your minimum drops. This will cut years off the time it takes to eliminate your debt and save you thousands in interest. Don't pay any more until your holiday savings account is completely funded.
Take just those steps, and next year you'll be able to forget about your holiday bills as easily as your unthankful relatives forget their gifts.
Honestly -- what a bunch of ingrates! I, myself, will never forget the thoughtful box of um pair of whatevers and uh thingamajigs that I think I got from someone I'm sure is a closely related mammal.
