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Don’t panic if you have already overspent on the holidays

Between Black Friday, Cyber Monday and Giving Tuesday, you have had several opportunities to exceed your holiday budget with still nearly a month to go.  If you find yourself in that situation, don’t panic. You have several options available that can use to get yourself out of this financial difficulty.
What is the first step to take if your budget is already busted?
Without a question, take your credit cards out of your wallet and stop all holiday spending, including food, decorations and most importantly additional gifts.  Don’t make the situation worse by continuing to spend.  You should take action now, not next year.
Is there a drastic measure to take if someone has really overspent?
Yes, start a spending freeze on all non-essential spending, this includes eating out, morning latte and other entertainment. All of this cash should immediately go to paying down the debt.  You might have to continue the spending freeze for a couple of months to make an impact.
What should be the priority to resolve this situation?
The top priority is to pay off the highest interest debt first. Pay the minimum on all other debt and focus all the extra cash you have on paying this debt off first.  Once the first debt is paid off, focus the attention on the next highest interest rate debt. There are other options if you want to focus on smaller debts or the ones with the highest payments.  Just choose a method now and start working to reduce your debt.
How can someone get extra cash to increase their payment?
Do a review of all your monthly expenses to determine where cuts can be made. This includes lowering your cell phone expenses, cable or satellite subscriptions and even refinancing cars or your mortgage.  Any and all of the moves should generate extra cash that can be targeted towards your debt.
Are there other options to get a windfall of cash during this time?
Sometimes you can skip a payment on your auto loan or other loans. Contact your financial institution and see if you qualify for this service. For a small fee you might be able to skip your next monthly payment and use those funds to pay down your holiday debt.
Are there any options besides looking at monthly expenses?
One that might be difficult but should be considered is returning gifts and finding lower cost alternatives.  Especially consider this if the gifts were for you and not others.  Returning bigger ticket items will make the most impact.
How should this impact one’s 2017 planning?
The biggest takeaway is setting a realistic budget for your 2017 holiday spending.  Don’t keep repeating the same mistakes over and over.  And, find ways to get extra cash to start saving for the holidays so that your holiday debt is more manageable next year.

Posted: 12/1/2016 with 0 comments

Categories: Debt Reduction, Money Matters, Spending

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