Why You're Still Paying for Last Christmas...and What To Do About It

by Gary Foreman

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How much did you spend on the holidays last year? Are you still paying for the presents unwrapped months ago? If so, you're not alone. Many people are still fighting with the ghost of Christmas past! Let's see if we can't help you understand why you're still paying for last Christmas and what you can do about it today.

We'll begin with how you got into trouble. Don't quit on us. We do have some suggestions following on how to get out of it.

Reason #1: You spent too much. If you spent money that you didn't have, you spent too much. Borrowing is never good. Borrowing for gifts and holiday parties is a really bad idea. Borrowing so much that you're struggling to repay it months later is a really, really bad idea.

Reason #2: You got caught up in the season. We all know that it's easy to get caught up in the holiday spirit. It happens to all of us at some time in our lives. You already have a present for Uncle Joe, but that (insert item here) would be perfect for him. And your holiday dinner party will be much more festive if you have a little champagne after dinner. But those unplanned expenses are the ones that blow your holiday budget and cause you to spend money you don't have.

Reason #3: You were influenced by what friends or family was buying. It's hard when a co-worker tells you about a great deal they just found online and you think it would be perfect for someone on your list. The only problem is that it's half again as much as you intended to spend, but you bought it anyway. Or, even worse, your sister always spends more on your kids than you do on her kids. And you didn't let her outspend you last year.

Reason #4: You didn't save enough before last Christmas. Although you meant to be setting aside some holiday money, you just never got around to it. So instead of spending savings, you pulled out the plastic.

Reason #5: You didn't have a plan on how to repay those loans. You needed money to buy Christmas gifts and didn't have it. So you did the nest best thing and borrowed it. You'd worry about how you were going to pay it back later. And, now is that later.

So what are you going to do to pay it back? If it were easy, you wouldn't be reading this. You might want to try one or more of these ideas.

Solution #1: Look for saving everywhere! Every time you reach for your wallet, purse or online account ask yourself if there's a less expensive way to do what you want. Everything from home repairs that you can do yourself to workday lunches should be considered.

Solution #2: Try a "no spend" week. People go on diets all the time. They'll stop eating one thing or another. You can do the same thing with your money. Take a week and only spend when you absolutely must. If your mortgage payment is due, pay it. But don't pick up Mickey D's because you don't feel like cooking tonight. See how close to no spending you can get.

Use these guidelines to choose the best plan to pay off your credit card balances.

Solution #3: See if you qualify for a lower rate credit card. If you have a good credit score, you might be able to get a new credit card with a lower rate. Bankrate offers a comparison chart.

Solution #4: Take a part-time job. Even a minimum wage job for 5 or 10 hours a week could be enough to make a quick dent in the amount you owe.

Solution #5: Sell something. Hold a garage sale or find some items that would do well on eBay. You might turn a Christmas present you don't use into the cash you need now.

Solution #6: Make it a family project and enlist your family's help. You don't need to solve this all by yourself. Your family received some of those gifts. It's only appropriate that they help. Ask them for ways that they can help save or earn some money.

Finally, resolve to not spend money that you don't have when Christmas comes along this year. You don't want to be in a similar place next year at this time.

Reviewed June 2017

Gary Foreman

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. Gary is available for audio, video or print interviews. For more info see his media page.

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