Do you have the Christmas “credit hangover” Blues?

If you don’t have those blues? Bravo, then send this info along to someone you may know, or apply it to other debt you may have, maybe start a New Year resolution. Here are some steps to follow to help ward off as much of the “credit hangover” as possible. For those not familiar with the term, it means that you cannot pay off the total balance of the credit you used for Christmas and it will now become an ongoing balance on your credit card.
1. Don’t wait until Jan for the statements to come to see the damage, be proactive, dig those receipts out OR easier, go online and see either recent activity if your credit card hasn’t cut-off yet, or latest account statement (or both if you had an extended period of spending). Add everything up.
2. You can proactively plug that total number into your Money Calendar and see if it takes you into the red down your calendar, if so you are going to have to make adjustments to get you out of the red. Gas prices should help a little, a few less eat outs or trips to the store, (see helpful hints for additional ways to cut back). Time to tighten that belt, the little pinch now will be a lot better than the mound of debt that could stockpile later on. If you don’t have a D2D Money Calendar and aren’t currently a D2D Member ($150 per year for ALL my coaching and software, not payable until I have saved that amount at least 3-fold) you can purchase a copy of the D2D Money Calendar for $29.95 for 2009. If you would like to test drive a copy I will send you 3 months for free to try it out.
3. If the damage is a bit bigger than a month or 2 of cutting back, we will need to plan accordingly. In addition to cutting back on the incidentials for a few months, we will first have to calculate your cash flow (income minus expenses), this can be found on your Financial Statement. Once you have the Cash Flow, divide that into your total credit card Christmas debt and see how many months it will take to pay that off.
4. Now write that plan down, this is the important part, this makes you accountable to the plan. Share the plan with a friend, spouse, family member, someone you can be accountable to, you can always email me and I can help be an accountability partner for you. Answer the following questions: How many months will it take to pay off? What steps you can do to cut back? When you will have it paid off? Was the debt worth whatever you spent it on? Then once it is paid off, go back and list all the things you can remember that you bought on credit and for who (you would be suprised how quickly we forgot where all the money went) This exercise, if done correctly, should help curb the urge for spending next time. Also see under helpful hints, creative ways to have Christmas without spending on credit.

As always the “Hangover” is the worst part of any party, so remember not only should you drink responsibly during the holidays but you should also spend responsibly.

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~ by debt2dreams on December 29, 2008.

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