Christmas Debts: Making January that much Easier to Manage

Christmas is a wonderful time of year, with festivities, parties, food, presents and all sorts of fantastic goings on to make life seem that little bit more manageable. However, it is also a time of great stress for many. There can be little doubt that Christmas costs an absolute fortune and many families simply cannot afford it this year as a result of the recession, government cuts, loss of jobs, higher energy prices… and the list goes on. In lieu of spending less though, many people simply choose to build up Christmas debts instead. This is understandable, and an absolute must, if you have children or a large family but it can heap an awful lot of pressure on you in January. The last thing you want to do is to create a debt crisis and worst case scenario going bankrupt. As such, you may want to take note of the points outlined here for helping you to cope with Christmas debts from this moment on.
First of all, it is important to make sure that your Christmas debts are as manageable as possible by budgeting. Although you may have already spent a fortune by now, formulating an absolute maximum threshold of spending is important and sticking to it is even more vital. This way, you can manage your Christmas debts, keeping them to a level that you believe you will be able to clear sooner rather than later.
When it comes to paying off your Christmas debts, start as early as possible and prioritise them. Taking the first point, do not wait for a bill to pay money off a debt. If you find that you have a little money to spare over and above what you would normally have then pay it off a debt immediately. Why wait when you are being charged interest on your Christmas debts?
Secondly, it may be that you have spent on several store and credit cards in your preparations for Christmas. If this is the case then paying them all off may be a real problem. As such, you should find out which have the highest levels of interest and pay more off those. Of course, make sure that you meet the minimum payments on each debt but always prioritise those that cost you the most.
Speaking of minimum payments, always be sure to pay more than the minimum on every debt if you possibly can. Christmas debts soon become year round debts so paying even £5 extra off every credit card and store card you have will be a big help in the long run. It will save you money on interest and contribute to you becoming debt free sooner rather than later.
The most important thing with managing and paying off Christmas debts is actually making a payment though. If you fail to make payments on your credit cards or store cards then you not only increase your debt by incurring charges but you will also find that your credit score begins to slip. All missed payments will have a negative effect on your rating if you fall behind so ensuring that you do not is a must and talking to your creditors may help. Credit and store card providers much prefer individuals that are having issue with their Christmas debts call them before a payment is missed because it gives them an opportunity to put measures in place to help.
Managing your Christmas debts responsibly can give you a major advantage when it comes to paying them off and avoiding more serious methods of debt management. It is never easy getting used to paying off debts, whether you did not have any before or now have more as a result of the one special day that families come together on every year. However, with a little planning and sensible action, you could have your debts under control from day one and paid off in no time.

Andy Gorton is the author and editor of the Bankruptcy Clinic

Andy Gorton – who has written posts on Bankruptcy Clinic Blog.

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