As we approach the holidays, many of us are spending time with family and friends, sharing good times, giving gifts and hosting parties. These are all perfect opportunities to spend money. But be careful! Don’t spend money you don’t have, don’t buy things on credit that you don’t really need, avoid throwing extravagant parties.
It is important to think carefully about your money. You have worked hard for your money, you need to spend that wisely on shelter, clothing, your children. Because you do work hard, you deserve a reward every now and then, but do not reward yourself at the expense of your financial health.
Credit itself is not bad, if you are purchasing an asset such as a house or a car. If you make your payments on time, once you pay off your loan, you will have an asset long-term. But when you start buying vacations, gifts and perishable items (like groceries) on credit, it becomes a problem. Here are some tips to avoid turning nights out for dinner, drinks and gifts into a debt trap:
1. Agree with friends and family to do a gift swap. Draw names, and rather than buying for everybody, you only have to buy a gift for one person.
2. Rather than going out to eat, entertain friends at your house.
3. Plan ahead for gifts – you will always pay more for last minute shopping.
4. Do not be sucked in by festive marketing offering “free” gifts with purchase, these are usually items you never thought of and do not need.
5. Don’t open a store account at every place you shop. Never purchase gifts on credit.
Overall, this Christmas season, be happy and jolly but do not be carefree with your spending. Think carefully about everything that you want to buy. Before you purchase, ask yourself whether you really need that new pair of shoes. Or whether you can actually afford that expensive gift for your loved one. Don’t start the New Year with a financial hangover!
Kimberly Stevens, Bankruptcy Attorney for Larreau & Lythgoe, PC. Ogden, Utah
Contact Utah's Law Firm at 801-393-5555