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HomeBlog Credit Card DebtWhat To Do When You Come Face To Face With Your Holiday Debt
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What To Do When You Come Face To Face With Your Holiday Debt

January 26, 2016 by National Debt Relief

Santa man looking at holiday debtWere you able to successfully save yourself from holiday debt? If not, well, you are not alone. A lot of Americans have accumulated a lot of debt after the season.

According to an article published on CheatSheet.com, overspending is something that Americans are used to doing. In fact, the article goes as far as to say that it has become a holiday tradition. Based on the survey done by Sun Trust Banks, 46% of American consumers are pressured to spend more than they can afford during this season. That means they are willing to be in debt to give themselves and their families the holiday celebration that they think they deserve.

Apparently, a lot of American consumers are willing to spend a lot of money during the holiday season. They are feeling more confident about their finances that they can gamble their money to buy more expensive items. If you were among the confident consumers last holiday season, you must have been spending a lot of money just to make the festivities a fun one for you and your family. There is nothing wrong with your intentions to make your family happy. But if it involves holiday debt, then you need to think twice before you spend more. You may have ended the year with a bang but try not to start the year with financial problems.

If you are already in debt after the holiday season, that is okay. Move on and aim for a better spending behavior. But for now, let us work on the debt that you already incurred.

What to do when your debt last holiday catches up on you

After all of the festivities, we are now back to reality. As the first month of the new year draws to a close, we are now faced with the billing statements that reflect our spending during the holidays. According to an article published on WashingtonPost.com, the overall spending for the 2015 holiday season is $626.14 billion. This is according to the data gathered by the National Retail Federation. While this is lowered than the expected sales of the organization, it is still a 3% increase from the previous year.

The article did not indicate how much of the sales came from credit spending. But one thing is for sure – there is no doubt that people are now more financially confident. They are no longer afraid to spend their money even if it will lead them in debt.

While you may have incurred some holiday debt, that does mean it should stay. You have to work hard to get rid of that as soon as you can. The earlier you accomplish this, the more money you can use from your budget to improve your finances this year.

So what can you do with the debt you accumulated at the end of 2015? Here are the steps that you need to take.

  1. Survey the damage. Start by finding out how much debt you owe. If you have previous debts, put that aside first. Concentrate on the debt that you got during the holiday season. If you used more than one credit card, make sure you create one file that will reflect all of the debt you incurred. Once you have the total, look at the minimum payment requirement that you need to contribute each month.
  2. Analyze your budget. After organizing your debt information, it is time to look at your budget. Look at your income and your current expenses. Take special note of your existing debt obligations. Combine your holiday debt with your existing ones. Create one file and calculate the minimum payment requirement of all your debts. See if your income can cover your usual expenses and the new debt amount that you owe.
  3. Find the funds. The next thing that you have to look into is finding the funds that will allow you to pay off your debt. This will be harder if your income cannot cover the minimum payments that your debts will require each month. You may have to get another job or a side gig in order to meet all your credit obligations. You can also choose to lower your spending so you can free up the funds to send towards your debt payments.
  4. Adjust your financial goals. The next step is to revise your financial goals. If you are planning to save up for a vacation this year, you may have to rethink this target if it makes paying off your holiday debt difficult. You need to make some sacrifices if you want to solve your holiday financial hangover.
  5. Plan for next year’s holiday spending. This may seem too early but if you think about it, there is wisdom in being prepared. The earlier you start preparations, the less of a burden it becomes. It does not have to be anything grand. You can start by setting a budget for your holiday spending and save up for it. That way, your finances will be ready for the heavy-spending that the next holiday will bring. You do not have to be worried about how you can stay out of holiday debt.

Tips to manage your debts this year

Since you are working hard to solve the credit incurred during the holidays, you should probably think about the rest of your debt obligations. If you are motivated to improve your finances, you need to seriously find a debt solution that will lower your balance significantly this year. Once you have gotten rid of your debts, you can now concentrate on growing your personal net worth.

Take for instance credit card debt. According to an article from CNN.com, American consumers ended 2015 with over $900 billion worth of credit card debt. While it is unclear how much of these were spent during the holidays, it is clear that the country has a lot of debt to pay off. The report from CardHub should serve as a wake-up call for all of us. You do not want to be caught in another financial crisis just because we allowed our credit card debt to reach great heights again.

You need to make a commitment to manage your debt this year. To do that, here are a couple of tips that can probably work for you.

  • Borrow only what is necessary. Always borrow only what you need. If you only need a 3-bedroom home to house your family, do not borrow a home loan that will allow you to buy a 5-bedroom property. This is true even if you can get approval for it. Sometimes, bigger is not always better.
  • Plan your credit use. If you have to borrow money, make sure you approach it with a plan. Understand the purpose of this debt. How much can you afford to borrow without compromising your current lifestyle? How will you pay off this debt while paying for all the other expenses that you have? Do you have a debt payment plan in place? Make sure you make smart debt decisions by understanding your current financial position.
  • Monitor your credit score. Finally, you want to make sure that you are monitoring your credit score. The Federal Reserve mentioned that they intend to raise the interest benchmark this year. That means the financial institutions will follow and raise their own rates. If you have a good credit score, you can be qualified to get the lowest rates that the financial industry can offer. To maintain a good score means you have to monitor it.

Your holiday debt may be like a financial hangover but it does not have to stay for long. If you are committed enough to work on your debt situation, you can be in full control of your finances this year. This could be the year when you go through the biggest financial improvement in your life.

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National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

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Easy National Debt Relief Caller: April Transcribed WE 1/17/2021 April: Our call may get recorded. What financial concerns had led you to seek out National Debt Relief's services? RILEY: I guess just not being able to pay my debt. April: What had you choose National Debt Relief over other companies that provide the same service? RILEY: Really just researching online. Everything that I had read about them seemed pretty positive. April: What service or program did National Debt Relief help you to get through? Like a payment or consolidation program, anything like that? RILEY: I just do bi-monthly payment to them, and then they reach out to my debt account, I guess, that negotiated everything for me. So, it’s pretty easy. April: Can you walk me through the process of what you went through to enroll for the services? RILEY: God, it's been like two years, so I kinda don't really remember. I just had to fill out some stuff online and then talk to them on the phone. I had to give them all my account information and everything. And then they worked out a payment plan for me. And they communicate with me like once a month with my statement. And whenever they have communication with my accounts, they have called me and had me verify before they've done anything and whatnot. April: That sounds like a really good service there. RILEY: Yeah. April: At this point, are you still in the program or have you completed it at this point? RILEY: I'm almost done. It was, I think, a two-year plan. So, yeah, I think I just have one other account that I'm paying on. April: How about any interactions with the negotiators? You said they will call you at any time that there was maybe an account activity that they want to confirm with you first. RILEY: Uh-huh [yes]. April: So, how is the interaction with them when they reach out to you and you're able to discuss with them? How is that interaction? RILEY: It's been super easy and positive for me and relieves a lot of stress and anxiety. So, yeah, it’s been very easy. April: And then how has National Debt Relief been able to work with you in terms of your payment plan? RILEY: I basically just told them what I could afford, and they figured it out. And they have offered COVID relief if I need to stop payment for the time being or whatever. Fortunately, I haven't had to do that. So, I don't really know how that would have worked, but that was an option. But they're always like, “Call us if you can't make payment, and we'll figure something out for you.” April: What are your thoughts about the cost in relation to the quality of the service you received? RILEY: I'm really happy with the program. [unclear 0:04:22] as far as I know. I don't have any complaints. April: Has working with National Debt Relief impacted your life? RILEY: Yeah. April: How would you say that it's impacted your life at this point? RILEY: It just has relieved a ton of pressure and stress, financial stress, anxiety. I'm not living paycheck to paycheck now to pay my interest, so that’s been nice. April: Have you had other experiences to National Debt Relief that perhaps you want to share with us in regards to your experience with them? RILEY: No. I think that’s it. April: On a scale of 1 to 5, where would you rate National Debt Relief, if 5 stars is that you recommend to your friends and 1 star is you're very dissatisfied? RILEY: I would say 5. April: In a few words, how would you summarize overall the National Debt Relief in your experience with them? RILEY: Just easy and stress-free. April: Would it be okay for us to also utilize your commentary as a review that we can publish for National Debt Relief? And that would go to public webpage here, but that's to help other consumers make good choices if they're also in the same market. RILEY: I guess. Would it have my first and last name? I don’t— April: Only the first name. And if that's an issue, we do the first letter. RILEY: [unclear 0:06:03] you want my full name. April: Not at all. So, we only do the first name as an option. We can also do the first letter. So, it's really up to you on which option you prefer. But just the first name. We don't do last name. We don't post anything personal like your phone number. RILEY: Yeah. I think you can use my first name. April: I do offer a link that we can also send you with a direct link to your review. So, once it's published, you also get to see directly. Is that something you would like to have sent to your email? RILEY: No.

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