If you owe $5,000 of more on your credit card or know someone who
does, who only pays the minimum payment each month, you are not
alone. The levels of consumer debt are increasing rapidly around
A Debt is Not Just for Christmas
Christmas is the time of year when many consumers fall into the
trap of spending too much money on expensive Christmas gifts.
Most of these purchases are made on credit cards rather than
using cash. This means these consumers often end up with large
credit card debt in the New Year. The New Year is also the time
when bills for other expenses, such as holidays, school fees and
taxes come due.
Credit cards are an expensive convenient source of money and many
people don't realize just how expensive they can be. Remember
gifts purchased on your credit card that you will not be paying
in full, will become a debt. This debt will be with you long
after Christmas is gone. The most damaging part of this process
is the interest you pay on your holiday purchases over time will
be more than the cost of the gift. This interest payment you are
making will also become someone else's investment return.
Tips to Avoid the Post-Holiday Credit Card Blues
1. Make a budget for Christmas spending - add 20% to the amount
and stick to that number.
2. Write a list of everyone you plan to buy presents for and the
amount of money you can afford to spend on each person's gift.
3. Pay for presents using cash or lay-away rather than credit
cards - if you have to use credit cards use only one.
4. Use a card with the lowest interest rate and credit only what
you are able to pay off in one payment or within three months.
5. Give yourself time to shop - avoid last minute impulse buying
of whatever you can get your hands on.
6. Write down everything you buy for the seasons, food,
decorations, cards etc, and their cost - keep a running total.
7. Consider opening a Christmas Savings Account, so that you will
be better prepared next year - for $10 per week, you will be over
$500 ahead of the game next Christmas.
8. Gather all of your bills and obligations in one place and
write down what you owe, to whom and at what interest rate - Now!
Be complete and honest with yourself.
Get a Jump Start on Holiday Planning for Next Year - Invest in
Make a present to yourself this Holiday Season by investing in
yourself - eliminate your debts and start your wealth creation
1. Take any "downtime" during the holidays to make a list of your
financial goals for the next year, two years after that, then
five years and longer.
2. Add up household expense budget for this year and add 5% to
that amount. Start a monthly program to set aside 10% of the
amount for the next 10 months starting in February of 2005.
3. Read a self-improvement book such as "The Automatic
Millionaire" by David Bach.
4. For some people depression comes with the holidays - tame the
depression with the knowledge that you can make 2006 a more
fulfilling and enjoyable year financially.
5. Take time to assess how financially secured you are - review
your insurance needs, emergency fund, wills and overall debt and
Remember your Real Worth is not only measured by the material
gifts you give. This Holy Season is a profound and powerful time to
commit yourself to new beginnings, to start new practices and to
choose what you want your financial life to be in the coming year.
Very few people choose financial clarity as one of their new
practices. Plan for your expression of love not only through gift
giving to others, but also a gift to yourself for a secured
Financial Future. Make a painless New Year's resolution that will
give you the "Holiday Feeling Financially" for many years.
Joan Peterkin is President and Founder of Wealth Initiators Inc.
Joan helps families in Ontario, Canada, transition from being in
debt to building long-term wealth and financial security. Get her
FREE report "The Top 7 Reasons to Live a Debt-free Life" by
sending an email to:
more information, visit Joan's website at
call 416-497-6786; toll-free: