10 Best Debt-Busting Holiday Strategies for 2008
By Cindy Morus, Creator of the Pay Debt Quickly System
According to a Gallup poll, the average American family will spend $801 this year on Holiday gifts. Remember an average means that some people spend way more and some people spend a lot less. With economic times tough this year for most people, it’s a good chance to talk to your friends and family about cutting back on Holiday gift giving, seeking alternatives or even eliminating it altogether. Most people have more than enough “stuff” and that’s why they are so hard to buy for.
I’m going to be below that average number for several reasons. About 20 years ago, when the grandkids started arriving, most of my extended family decided not to purchase Christmas gifts for each other with the exception of my sister and her husband who have no kids but are generous with the nieces and nephews. Even my Mom and Dad suggested that we not exchange gifts this year due because of the hit their retirement accounts have taken.
I’ll be buying wine from Phelps Creek Vineyards for my sister and hubby (Sh, don’t tell), my son gets a ski pass and my daughter a check because she’s saving to go to London for the Spring term. That’s it for me. How about you?
And remember, the Holiday isn’t all about buying and giving! Most people want more of the spirit of the season — friendship, music, love. Don’t be so obsessed with the buying and spending that you wind up with stress, hassle and shopper’s burnout. Plan to incorporate the things that really matter in life: spending time with family and friends, being part of a community, enjoying your faith and just plain having fun.
Doing some planning now along with a shift to the spirit of the season, can make the New Year much happier since you know massive credit card bills won’t be filling your mailbox.
Here are some specific ideas. Implement one or all!
1. Make a Spending Plan and Stick To It. Decide in advance how much you’re going to spend on each person AND the total amount you plan to spend on everyone. That way, if one gift is more expensive than you expected, review the rest of your list to find reductions so you don’t exceed your overall spending plan. Don’t forget decorations, cards, stamps, wrapping paper.
It can be tough to stick to a budget when those around you are big spenders. If you want to change the gift giving pattern, do it early before people start making purchase.
2. Do Something Different This Year. Instead of buying a gift for every person, you can draw names (Have kids draw other kids and adults draw each other). One family I know always has an additional twist like buying something for the person that starts with their first name. For example, Jean might get a Jacket and Rebecca a Robe. Have a dollar limit.
You might also consider purchasing a family gift or brothers and sisters can go in on something bigger for Mom and Dad than they could purchase individually. My kids have been doing that for years because we set a low dollar limit on how much they could spend on us and each other.
A “white elephant” take away is also a fun way to spend the day and everyone gets a good laugh. Ornament gift giving can also be fun and a way to create memories for many years to come.
3. Set a Limit on the Number of Gifts. Young children get overloaded very easily with quantity so Mom and Dad might limit the number of gifts their children get. You can spread the gift giving out over several days, too, which gives them time to play with their gifts. If you do get too many, think about putting some away for a few weeks.
4. Spend time, not money. If you’re short of money, offer gifts of your time: Baby-sitting services for exhausted new parents. Painting assistance for a friend who just bought a house. Pet-sitting for traveling neighbors. Grandparents can teach grandkids a skill. I can still remember the Christmas my grandmother taught me to knit.
Organize an Appetizer potluck or Progressive dinner with your friends or family. Everyone brings or prepares something so the cost and work are spread around. And make sure everyone does their share of clean up, too!
5. Connect with your Community. Whether or not organized faith services are part of your tradition, there’s a lot going on. Here in Hood River, there are food drives, community meals, holiday concerts and performances, and lots more. It’s a good chance to get out and catch up with people you might not see but once or twice a year.
6. Gift Giving Alternatives. Donate to a cause that’s important to the recipient (check out charities at www.CharityNavigator.org). Purchase gifts that benefit others. Lutheran World Relief – one of the top-rated charities (www.lwrgifts.org) has lots of great ideas from critters to water to education. You might want to ask them what cause they’d like you to support.
Ask family members to consider contributing to your kids’ college accounts. That’s a gift that last for the rest of their lives.
7. Use up Store Credits and Gift Cards. This is going to be especially important because a number of stores are already slated to close their doors after the Holiday season and a lot more will probably do so before the end of 2009. Many gift cards lose value or expire over time so get them out and use them up.
8. Take Yourself Off the List. The National Retail Federation reports that the average shopper will spend $99 on themselves! You might also talk to your spouse or significant other to create a plan – maybe you could the money for something you need for the house or cars and if you’re not sure of your job prospects for next year, start a savings account.
9. Use Send Out Cards for Christmas Cards and Gift Giving This Year. Send Out Cards allows you to choose a card from over 13,000 designs and you can even upload your own photos and have a custom card. They’ll print them and send them out with a real first class stamp for about $1 per card. And you don’t have to go to the store, post office, or lick.
10. Create Your Own Family Traditions. Everything in our world is shifting and it’s a chance for you to create your own activities and traditions. The first year the kids got ski passes, I told them that’s all they would be getting. They asked “What will we do on Christmas?” and I said “Go Skiing!” I didn’t plan Christmas Day dinner and they were starving when we got home so I made Tuna Noodle casserole and that became our Christmas Day dinner tradition!
Think forward to end of the Holiday Season and how you’ll feel about the amount of time, energy and money you spent. If you don’t like the outcome, change it now. There’s no such thing as the Holiday you read about in a book or see on TV – you don’t have to be held hostage to the Super Christmas. Take a few moments now, check in with your spouse and kids and decide how you want your Holiday to turn out.
More Help from Cindy:
Trouble with debt? Eliminate your debt and save your money using the Pay Debt Quickly System. It comes with the software and strategies you need get rid of your debt without making an large payments or making any significant lifestyle changes. Click here to learn more and get started right away or sign up for her free Powerful Debt Reduction Starter Guide.
Credit & Divorce
By Cindy Morus, Creator of the Pay Debt Quickly System
Mary and Bill recently divorced. Their divorce decree stated that Bill would pay the balances on their three joint credit card accounts. Months later, after Bill neglected to pay off these accounts, all three creditors contacted Mary for payment. She referred them to the divorce decree, insisting that she was not responsible for the accounts. The creditors correctly stated that they were not parties to the decree and that Mary was still legally responsible for paying off the couple’s joint accounts. Mary later found out that the late payments appeared on her credit report.
If you’ve recently been through a divorce-or are contemplating one-you may want to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits-and pitfalls-of each.
There are two types of credit accounts: individual and joint. You can permit authorized persons to use the account with either. When you apply for credit-whether a charge card or a mortgage loan-you’ll be asked to select one type.
Individual or Joint Account
Individual Account: Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any “authorized” user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.
Advantages/Disadvantages: If you’re not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse’s income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.
Joint Account: Your income, financial assets, and credit history-and your spouse’s-are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible for seeing that debts are paid. A creditor who reports the credit history of a joint account to credit bureaus must report it in both names (if the account was opened after June 1, 1977).
Advantages/Disadvantages: An application combining the financial resources of two people may present a stronger case to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Former spouses who run up bills and don’t pay them can hurt their ex-partner’s credit histories on jointly-held accounts.
Account “Users”
If you open an individual account, you may authorize another person to use it. If you name your spouse as the authorized user, a creditor who reports the credit history to a credit bureau must report it in your spouse’s name as well as in yours (if the account was opened after June 1, 1977). A creditor also may report the credit history in the name of any other authorized user.
Advantages/Disadvantages: User accounts often are opened for convenience. They benefit people who might not qualify for credit on their own, such as students or homemakers. While these people may use the account, you-not they-are contractually liable for paying the debt.
If You Divorce
If you’re considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it’s important to make regular payments so your credit record won’t suffer. As long as there’s an outstanding balance on a joint account, you and your spouse are responsible for it.
If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Or ask the creditor to convert these accounts to individual accounts.
By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.
More Help from Cindy:
Trouble with debt? Eliminate your debt and save your money using the Pay Debt Quickly System. It comes with the software and strategies you need get rid of your debt without making an large payments or making any significant lifestyle changes. Click here to learn more and get started right away or sign up for her free Powerful Debt Reduction Starter Guide.
The PDQ Factor
By Cindy Morus, Creator of the Pay Debt Quickly System
It’s just about the beginning of a brand new year: a time to set goals, make plans, and start afresh; a time to dream of making more money, having a more beautiful body, and experiencing more love. I can’t help you with your body or your love life but I can show you some tools for making more money this year.
Have you ever heard of the PDQ Factor? Probably not, but you probably have heard of the acronym PDQ, which means “pretty darn quick” and that can be expensive: think fast food, fast cars, and fast women. This PDQ, The PDQ Factor will save you money. In fact, it can even make you wealthy over time.
To illustrate…take an empty glass and set it under the water faucet. Now turn the faucet to a single drip, or a slow trickle if you’re really impatient, and watch the glass fill up. It takes a while but it does get full. If you were thirsty, it wouldn’t have been nearly as fast as turning the faucet to full force but it was just as effective. The PDQ Factor is the slow trickle equivalent in the world of money. It stands for Pennies, Dimes and Quarters. Nickels count too, they just messed up the snappy title so we left them out; but don’t you leave them out of your investment toolbox.
Here’s an easy plan to make an extra $1000 this year. It won’t take much time or energy-really none at all. By investing just $2.74 a day-the cost of a designer coffee drink; a bad drive-thru meal; or 8 quarters, 5 dimes, 4 nickels, and 4 pennies, in just 365 days you will have an additional $1000 in the bank. Did you know that accumulating wealth is this effortless? Make a plan, stick to it and watch success sneak up on you in teen-tiny increments.
With no pain and all gain you’ve just set a financial goal; a goal that can be effortlessly reached by making a very minor tweak or two in how you live your daily life.
Break down your goal and see how many PDQ’s it takes! And don’t forget to start today!
The same thing applies to debt. If you’re struggling with debt and it feels like you’ll never see the end, you can apply the same principles.
Get More Help:
Eliminate your debt and save your money using the Pay Debt Quickly System. It comes with the software and strategies you need get rid of your debt without making an large payments or making any significant lifestyle changes. Click here to learn more and get started right away.
3 Steps to Eliminating Debt
By Cindy Morus, Creator of the Pay Debt Quickly System
Are you struggling with debt? I’ve been there (and it was a major cause of my divorce). This is information I wish I had known then.
Step 1: Draw a Debt Picture Gather all your statements and enter your information in the Debt Payoff Info worksheet. You’ll need to know your balance, interest rate and current payment. Total the balances and the payments. Acknowledge that you used your credit cards to fund your lifestyle and move on to debt-freedom.
Step 2: Stop using your Credit Cards The credit card companies are masters at this game and if you’re carrying a balance, you’re on the losing end of the deal.
* Did you know that new purchases don’t have a grace period if you have a balance?
* Did you know that new purchases don’t usually get the existing teaser rate?
* Did you know that if you have multiple interest rates on the same card that most or even all of your payments will go to the balance with the lowest interest rate while the balances at the highest interest rate just keep compounding?
These are all great reasons to stop using your credit cards now!
Step 3: Convert Minimum Payments to Fixed Payments This is the beautiful part! Let me explain. When you get a home and auto loan, you pay the same amount of money for a specific amount of time and then you’re done and the debt is paid off. With a credit card, though, your payment is a percentage (usually around 4%) of your balance. As you make payments, your balance drops and so does your minimum payment. This is what will keep you in debt jail for a very long time.
However, you don’t have to make just the minimum payment. I recommend that you take the minimum payment from this month and pay that same amount every single month until it is paid off. Converting your credit cards payments to fixed payments can save years and years and thousands of dollars. Let’s see how much this method can save by looking at one client’s debt information:
Name Interest Rate Current Balance Minimum Payment
Visa 32.24% $970.86 $29.00
MasterCard 19.49% $1,506.00 $128.00
Cap One 16.24% $11,700.00 $277.00
Store Card 13.07% $1,407.00 $42.00
Auto Loan 8.09% $10,356.00 $237.00
TOTALS n/a $25,940.00 $713.00
Paying the minimums only will take 350 months and cost $49,007 (total interest is $23,067 almost double the current balances!). Changing the payments to fixed (paying the same amount every month as listed above) will take 47 months and the total will be $33,272 ($7,332 in interest). Total savings is $15,735 and over 25 years!! AND they didn’t pay any more than they paid this month.
Get More Help:
Eliminate your debt and save your money using the Pay Debt Quickly System. It comes with the software and strategies you need get rid of your debt without making an large payments or making any significant lifestyle changes. Click here to learn more and get started right away.
What Do I Do if My Debt Payments Are Higher Than My Income?
By Cindy Morus, Creator of the Pay Debt Quickly System
Question: I don’t know how to pay off my debt. My debts are more than the money I earn each month. What can I do?
Answer: That’s a tough spot to be in. Let’s look at the scenario that your debts are higher than your income but you’re still able to make the payments. It sounds like this is really worrying you – maybe that you won’t be able to make the payments soon. So, now is a good time to be asking this question. Since you can make the payments, every month, you’re actually in a good position to be able to eliminate the debt over the next couple of years (perhaps sooner). Here’s what to do…
1. From Minimum Payments to Fixed Payments. Convert all your current minimum payments to fixed payments. That means that if you are paying $55.55 this month, you’ll pay that every single month until the debt is paid off – no matter what the minimum payment is on your bill.
2. Stop Using Your Credit Cards. There’s no grace period on cards that have a balance so you start paying interest on new charges immediately.
3. Get Clear on Your Debt. List every one of your debts on a piece of paper (you can get my form here) so you know exactly what you’re dealing with. Sometimes it’s worse than you thought and sometimes not so bad but you won’t be able to really know until you see it all in black and white.
Get More Help:
Eliminate your debt and save your money using the Pay Debt Quickly System. It comes with the software and strategies you need get rid of your debt without making an large payments or making any significant lifestyle changes. Click here to learn more and get started right away.
