Have A Very Merry, Debt-filled Christmas?

The Christmas season..

The Christmas season... the time of year when both budgets and diets go out the window. You've probably justified giant purchases to yourself (or to others) by saying, "It's OK. It's Christmas!" For some reason, even the most unwise of purchases seem like a good idea as soon as the Christmas carols start playing.

Unfortunately, all of that Christmas spirit will soon go sour, as soon as the credit card bills come. Once the presents have been opened and the tree has been put away, it'll be time to deal with any bad purchasing decisions you made.

If your annual Christmas spending cycle is made up of December extravagance and January regret, you're not alone. Americans spend a whopping $525 billion during the holiday season! And, despite the fact that the economy is still very rocky, Christmas spending figures are as high as they were before the recession. Online spending figures alone have gone up by 12%.

That's because Americans are spending money they just don't have. And it's easy to do. After all, the average American has 13 credit cards!

That dinner for your employees is easy to pay for when you swipe your MasterCard. All it takes to get those extra stocking stuffers for the kids is a simple scan of your Visa card. Want to see the extended family over the holidays? Just type in your American Express number and you've got airline tickets!

The average person spends nearly $1,200 during the holiday season and at least 23% of it is put right on a credit card. In fact, estimates show that people spend 112% more when they pay with plastic, as opposed to cash.

And all of that spending adds up.

By the time March rolls around, a whopping one-third of bankruptcy filings cite over-spending at Christmas as a major contributor to their financial troubles!

Even if you don't wind up filing for bankruptcy, you're still in some big financial trouble if you over-spend at Christmas. That's because if you pay the minimum balance when your credit card arrives, 90% of your money is going right to interest. And it doesn't take long for that interest to snowball out of control.

So, what's the solution?

Even though Christmas is viewed as a magical time of year, you can't lose sight of your finances. Like any other day of the year, Christmas requires some budgeting and some restraint. Unless you want to have a major problem in January, accept the fact that you don't have an endless supply of money to spend on Christmas. Take a look at your finances each year and budget accordingly.

Showing your love at Christmas doesn't have to equal spending a ton of money. The truth is, if someone really cares about you, they won't even enjoy that extravagant gift if they know it put you into financial trouble!

by: Tony Mase

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