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Facing the Music: How to Dig Your Way Out of Holiday Debt
Another holiday season has come and gone. If you're one of the millions of Americans who charged holiday gifts, entertainment and travel, it's time to pay the piper. Holiday credit card bills will soon arrive in the mail, causing overspenders to sing the post-holiday bill blues.
For Consumer Credit Counseling Service (CCCS) of the Gulf Coast Area, Inc., each January brings the familiar refrain of consumers resolving to get their finances in order. "When it comes to debt, holiday spending often is the last dance," says Sharon McLean, executive director-operations, CCCS. "The holiday spirit leads many of us to overspend and stretch already-tight finances to the breaking point." McLean adds that the slew of credit card bills arriving in the mail often forces people to realize they're in over their heads financially.
If you have overspent this holiday season, CCCS has some suggestions for getting out of debt as quickly as possible.
- Note your spending. For a month, ask everyone in your family to track their purchasing decisions. Everyone should write down all expenses, including those 50-cent candy bars from the vending machine.
- Sharpen your budget. Armed with the spending data you gathered, calculate how much your household spends each month in all categories, including groceries, entertainment, utilities, housing and automobile. Then, compare the total of these expenses to your monthly income. You may find that you need to reduce spending in some areas to bring your budget into balance.
- Fine-tune your spending. In tracking your spending, you may have been surprised to learn exactly where your money goes. Often small daily expenses are budget beaters. For instance, a $3.00 per weekday coffee-and-Danish habit can add up to $700 a year. Getting out of debt often involves financial sacrifices, such as bringing your lunch instead of buying it or postponing a major purchase. However, in the long run, the satisfaction you'll get from being debt-free will be well worth it.
- To get out of debt, you must pay more than the minimum amount required. In fact, devote as much of your financial resources as possible to paying off these account balances - starting with the highest interest rate card. Any extra money from an inheritance, bonus, tax refund or other source should go toward debt reduction.
- CCCS can help you develop a budget or create a plan to get out of debt. It is a non-profit organization dedicated to helping people learn to manage their money and get out of debt. For more information or to set an appointment, call 1-800-873-2227.
- From the Consumer Credit Counseling Service
©2006 Texas Medical Center
E-Mail: tmc-info@tmc.edu
URL: http://www.tmc.edu/tmcnews/02_01_99/page_05.html
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