We’re still four days away from Christmas and five days from those clearance sales that would test the resolve of even the most disciplined shopper. But before you que the credit cards up for 70% savings, give yourself a likely much needed reality check. What good are those Santa themed pie plates if you’re still paying for them this time next year? Here are a few tips that could clue you in to overspending tendencies.
See No Evil
Ah…you’re already receiving credit card statements – and you’re already shoving them behind the chocolate covered cherries in the back of the cabinet. Out of sight, out of mind, right? Not so fast. It’s time to take off the blinders if for no other reason than to ensure there have been no charges you didn’t make. Fraudsters are clever, and they know how to work their craft so that they’re in and out of your account quickly – but not before racking up big bills. If you’re not paying attention, you could be leaving yourself vulnerable to policies set forth by your card company that could leave you holding the bag.
Just as importantly, though, you need to know what you’ve already spent. It could be just the right incentive to serve as a reality check. This is just bad financial management to not deal with it right away – even if it’s painful to open that envelope. Not the way to start the new year, right?
Got Budget?
One of the ways financial counselors can determine the success of their clients is by knowing whether or not that client has historically used a budget for managing his finances. It’s a good habit to get into and it can mean the difference in saving an additional $400 or spending $400 each year. Do yourself a favor and take care of that dreaded task. You’ll feel better and will be less likely to overspend in these final days before – and during – the clearance sales. Plus, with a budget, you have a better idea of how much the holidays are going to cost and you can plan accordingly.
Know the Damage
If you don’t know how much you’ve already spent, you’re already in trouble. You wouldn’t go to the grocery store and try to purchase $200 with only $100 in your bank account or on your credit card’s available balance, right? Of course not; that’s a nightmare no one wants to live. Sit down and face the music. Figure out what you’ve already spent so that you know what you can or can’t afford from this point forward.
Now That You’ve Looked
OK, so now you’ve finally ripped open that envelope and pulled out your credit card statement. Shocked? Convinced Donald Trump has racked up that extraordinary balance? Did your heart sink? You’ve overspent, yes? Once you get your heart beat regulated, kick into “Operation Credit Save” mode. You know how bad it is (or not). It’s time now to focus on that budget. Not disciplined enough? Consider speaking with a debt counselor.
Also – remember that getting your balance too close to your credit limit is flirting with danger. One slight mistake can send you over the limit, which can affect your credit scores, not to mention the hefty fee you’re sure to be hit with. If you’re too close to the fire, your top priority should be getting those balances down.
Have you taken out another credit card because: a.) you’re too close to your credit limit on other cards; b.) still have shopping to do but no cash, or c.) went over the limit on one card, which resulted in a higher APR and you want to transfer your balance to a newer card with a balance transfer option? If any of those are true, it’s time to step away from the credit cards.
Last night, talking to your mom or your best friend and the question of how much you’ve already spent comes up and you can’t honestly say, it might be time to step away from the credit cards.
If you went into this holiday season with one credit score and you check it again in January and it’s already taken a hit, it’s time to step away from the credit cards.
If there’s no emergency fund and you’re already living off of credit cards before the holidays even arrive, it’s time to step back and rethink your spending habits in their entirety.
Again, if you struggle with budgeting and debt in general, consider a financial counselor. Contact the Better Business Bureau – that’s always a great place to start. You’ll know right from the beginning you’re going to be put in touch with ethical and credible companies. The best part is after you come through it, you’ll have gained a lot of knowledge that will help you be in a much better financial place by the time the holidays roll back around.
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