Holiday Debt
Happy Holidays! Now put down that credit card — and back away slowly!
The holidays are a time for family, a time for togetherness, a time for celebrating another year passing, a time for observing your cultural and religious events — and a time for commerce!
Are you planning on a big holiday season? Are you and your loved ones going on vacation, or are you going to be spending time together at a family home? No matter what you will be doing, you will probably be spending money. And more money than usual, given the fact that gifts and food cost a whole lot, especially if there is a family gathering where you are expected to make everyone comfortable at the least — and at the most, completely spoiled.
Besides enjoying a season of winter wonderlands and family gatherings, full bellies and trees, and stockings overflowing with gifts, it appears that people are getting into quite a large amount of debt over the holiday season.
The average debt incurred by Americans over the holidays has increased to over $1,000! It is not just the actual debt that is a huge concern. Of course using one’s savings would be a far more preferable option, but not everyone has that amount saved or disposable, so folks are turning to credit and loans to get the holiday season they want — and that is where it gets complicated.
Many of those who borrow the money will take an extended time to pay it off, meaning the interest will accrue, and the debt increases over time. If you used credit cards for purchases which add up to $1000 and then paid off the minimum payment of, let’s say, $25 each month, you would need almost five years to pay off the loan!
It's no wonder people are generating debt. The average American is predicted to spend $967.13 on Black Friday. Not everyone has that kind of money just sitting around, stuffed into a pillow, or piggy bank.
Making sure you have all your accounts balanced is important, as this way you will be able to predict what kind of financial outcomes to expect in the coming year and can budget correctly and accordingly. Having extra debt is like a ball and chain around your ankle and could result in not having the money you need to spend on other things like emergencies, or in extreme situations your regular bills.
Have a warm and wonderful holiday season but be careful not to get into debt you cannot afford.
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