Going deep into debt is one of the leading reasons people file for bankruptcy. Although the spending pressures of the holiday season are just beginning, you can stay out of debt by treading carefully. You may not need a Los Angeles bankruptcy attorney if you resist the temptation to overspend.
Despite all the deals retailers are offering, and gifts you want to buy, you can stay on financial solid ground by:
Start planning as early as you can. Setting limits and giving yourself some structure allows you to budget and make wiser purchasing decisions. It also enables you to limit the use of credit and having to pay back expenses with interest. Without a plan, you can end up raking in $1,000’s of dollars in credit card debt from now through New Year’s, so think about:
- Who you want to get gifts for.
- How much cash is available.
- What you can spend per person.
- Your budget for unexpected gifts.
- Setting up a separate saving account.
The Christmas Club has been around since the Great Depression; you can set up an account at various banks and credit unions, and avoid the need for credit cards altogether. Saving early and anticipating your holiday spending needs can be beneficial in the long run.
Use Cash Whenever Possible
Sticking to cash will avoid spending what you don’t have. At the gift counter, there’s nothing to stop you from spending an extra $50 or $100 on credit. Spending in cash has a psychological advantage. Try something as simple as a cash envelope with all the money you intend to use for gifts. Once that’s gone, your budget has run out.
Do Your Shopping Over Time
Jumping the gun on deals often leads to spending more, a pattern that increases the chances you’ll someday need the help of an Orange County bankruptcy attorney. To avoid bankruptcy or excessive debt, keep your eyes open for deals year-round. That way, most of your shopping will be done by the holidays and there’s no need to strain your finances on lump purchases. You also space out your purchases over time, which makes it easier to stick to a budget.
Use Credit Only If Necessary
Spending on credit means you’ll need to pay back interest, so you end up paying more. Pick the right card if you do use credit. The advantages include accumulating rewards faster, consolidating yours pending, and being less likely to forget to make payments. Balance transfer credit cards with promotional interest rates, which remain interest-free for a period, can be helpful if you have significant credit card debt. And they can give you more flexibility for the holidays. Also, if you have credit card rewards, use them for direct purchases or to buy gift cards.
Think Outside Tradition
Holiday traditions are firmly tied to our consumer based economy and culture. But it doesn’t only take gifts to make memories with your family. Instead of overspending, try making holiday decorations at home, saving up for a trip, or doing some volunteering to create a unique experience.
Although there are ways to avoid serious debt after the holidays, out of control spending will eventually leave you scrambling for bankruptcy tips. If your debt has gotten out of hand, don’t hesitate to contact OakTree Law. Our Los Angeles bankruptcy attorney can provide you with various options to help your financial situation. Call 562-219-2979 or request a free evaluation today.