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The National Retail Federation predicts over a trillion dollars will be spent this holiday season--but too many of want to charge those purchase and many can't afford to incur that debt. I tell you how to avoid a holiday debt hangover come this January with advice from a credit repair expert.
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[Music]
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We are all in a rush to buy that perfect
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gift this holiday season with the
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National Retail Federation estimating
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consumers will spend a trillion dollar
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this holiday selling season. But how is
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everybody paying for all this stuff?
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The problem is nobody's paying cash or
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using debit cards. They're literally
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they're footing this bill on credit
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cards or these crazy buy now pay later
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programs.
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Experts say that's going to create a
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huge debt hangover come January 1st.
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Debt that many people really can't
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afford to take on right now because they
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already owe too much on their credit
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cards.
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Steve, if you have any credit card debt,
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and I'm talking about any debt at all,
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do not buy another gift with your credit
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card. And maybe you don't buy a gift at
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all because if you're buying it on a
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debit card, it just means that you
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should have been using that cash to pay
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down your credit card debt. A new survey
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by Money Lion has some startling news
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about the holiday, including the fact
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that 22% of us have returned a gift to
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pay bills or to buy food. And 14% of us
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plan to take out a personal loan to
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cover holiday gift expenses. 14% of
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people say they'll take out a personal
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loan to pay for gifts. What is the
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danger in that personal loan? Taking it
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out is one thing. Most of these
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consumers are using fuzzy mental math to
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figure out whether or not they can
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actually afford to pay that loan back.
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If you're already struggling with with
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your debt, right, the reason why you're
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taking out that loan is is because you
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can't afford the gifts that you're going
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to buy for this holiday season. So this
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year, maybe it is time to re-evaluate
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your holiday gift giving practices.
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Set those reasonable expectations. Let's
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do something very, very small. Hey,
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let's get some gag gifts this year.
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Let's make it fun, right? Nothing over
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20 bucks. And let's see what the
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creativity, you know, gives us. You can
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do secret Santaas. You can do potlucks.
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Set a firm spending cap for the holiday
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season. This is where most people fail.
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How much money can you actually afford
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to spend? And if it's nothing, so be it.
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If it's $500, you set the spending cap
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and then you start to take the pieces
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out. How much is it going to cost me to
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host the dinner? How much is it going to
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cost me to buy gifts? Before the start
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of the new year, figure out a debt
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repayment strategy. Work it out on paper
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so there'll be no surprises. That way
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you'll figure out how much of your
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income is going towards paying off your
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holiday debt on top of your regular
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everyday expenses working for you. I'm
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the consumer guy, Steve Spraer.
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[Music]
#Financial Planning & Management
#Debt Management