‘Tis the season for debt

Every year holiday spending per consumer goes up and much of that spending ends up as credit card debt. Shedding that holiday debt is harder than shedding extra holiday pounds.

At the holiday season it is hard for even debt-wary and credit-savvy consumers to avoid over-spending. It’s not easy to resist buying that special gift for that special person.

The best way to finance your holidays has always been the Christmas savings account. Saving for your holiday spending throughout the year and not relying on credit cards with high interest rates could end up saving you hundreds of dollars over the course of repayment.

The interest on these accounts is minimal, so don’t plan on making money. The discipline in saving ahead of time is a good exercise in financial management and the peace of mind you will have when you pay for your holiday expenses without running up credit card debt is priceless.

Next year, plan on saving for Christmas a little bit at a time. Contact a banking institution about their holiday spending account plans.

If you made a budget with us this year now is a good time to go over your books and see how well you did in sticking to it and if you made any financial progress this year. If you didn’t make your budget or plan your finances, the end of the year is still a good time to asess your annual income and expenses and check on the fitness of your financial situation.

Now is the time to review any changes in your life that occurred in the last year that will make changes in your financial needs or obligations and project how they will affect your bottom line in 2007.

Review insurance policies to make sure they are adequate. Evaluate your debt and how well you have done in paying it down. Develop strategies for reducing it in the coming year. Make a plan for savings and set a goal for a specific amount by year’s end. Review your assets, do you need a will? Look at refinancing at a better rate as a way to save money on your mortgage. Finally, review your retirement planning to see if it is sufficient and consider ways to save more for your future.

We may hate that word discipline when it’s applied to ourselves, but it is the single most important factor in deciding whether we are rich or poor. Without self discipline, we will spend lavishly on the whims of the moment and end up with a mountain of trash and no money.

So how to become disciplined where money is concerned? Gary Simpson of Personal Finance Budgeting suggests taking out a large denomination bill from your bank account, say $100, putting it in your wallet and then never spending it! To know that it’s there gives one a good feeling – and having the determination never to use it for purchases builds self discipline.

It’s a good system and I can see that it would work. That is, if you actually have $100 in your account, of course…

Everyone starts somewhere, I guess. Have a read of the article – it’s full of good sense.

Acording to Kelli B. Grant, there is a best time to buy everything. For instance, we all know that buying clothing at the end of the season when it goes on clearance will save you money and buying holiday items after the holiday allows you to take advantage of dramatic price slashes (as long as you are the kind of consumer who can plan a year in advance).

In addition to these types of savings, there are also best times to get better prices on airfares, appliances, cars, computers, even tickets for Broadway shows and baby clothes.

For the absolute best time to buy everything, see the article at Smart Money.

The Best Time to Buy Everything