Holidays and Debt
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 are 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.
It appears that people are getting into debt because of 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, although borrowing money is not the best way to get there. Of course, savings would be a better way to go, but not everyone has that amount saved or disposable. So folks are turning to credit and loans to get the Christmas season they want, and that is where it gets complicated.
Many of those who borrow the money will take ages to pay it off, meaning the interest will accrue and the debt increases over time. If you had $1000 worth of debt and paid off the minimum payment of $25 each month, you would need almost five years to pay off the loan!
It is 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 hanging about, stuffed into a pillow, or in a piggy bank.
Making sure you have all your accounts balanced and squared away is important, as this way you will be able to predict the upcoming type of year you will have and be able to budget correctly. Having extra debt, like a ball and chain around your ankle, could result in not having the money you need to spend on other things like emergencies. Make sure you are not getting yourself into debt you cannot afford.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC