Dave Ramsey says in his "Financial Peace" videos that if you use credit to pay for your vacation it will follow you home the next month in the form of a credit card bill. I am adapting this slightly to allow for Christmas....but you get the idea. As a bankruptcy attorney in Indiana, I can attest that nothing is worse than overspending in December only to receive the bill in January and realize it. So, how do you avoid overspending at Christmas time?
The first thing I will say is going to be painful, but here goes. If you are truly broke this Christmas don't buy any gifts. Yep. I said it. If you don't have any money to buy presents for your family then tell them you are short on funds and they will understand. I can just hear all of the readers in unison right now saying, "But what about the kids?!? I have to buy the kids gifts for Christmas!" Ok. I am not heartless. I agree you should probably try to get your kids a few presents (and only your kids). But I have seen Christmas trees at houses with 2 children that rival a toy store in their volume of gifts. Do not go that route. I suggest letting your children know that this year you are going to concentrate on the religious part of the holiday and are going to scale back on gifts. Another tip to help stretch the presents for the kids is to talk to the grandparents. Let them know you are having a hard time and that you don't want to go into debt for Christmas. I think many grandparents would allow you to add your name to a gift or two. Lastly, this is a great opportunity to make sure you stretch your dollar on the gifts you do buy. Don't just go out and buy the tea set Suze wants this year. Wait for it to go on sale and look into whether there are any other discounts available. Finally, on Christmas (depending on the age of your kids) you may think about waiting until after dinner to open gifts. A lot of the fun is in the anticipation, isn't it? Make sure that you open gifts one at a time so that you are able to stretch out the fun!
For those of you who do have a bit of money to spend on Christmas, I hope you have set a budget by now. If not get out a piece of paper and list out the people who you need to buy for as well as a dollar amount. In a perfect world you would have started to save by at least October by taking cash each month and putting it in an envelope. Then when you do go out shopping plan in advance what you plan to buy for each person on your list and then use the cash to pay. Once the cash is gone NO MORE PRESENTS! Seriously, if you are out of cash and haven't bought your kid's teacher, the mailman, the paper carrier or the bus driver a gift life will go on. Consider baking cookies or bread for gifts for people you want to acknowledge on Christmas without breaking the bank.
I certainly didn't invent the Christmas envelope idea. One personal finance expert in Indianapolis, Peter Dunn, does what he calls a holiday savings league. In the event you signed up for his saving league using this program you may even win gifts. I do subscribe to Peter Dunn's blog (you may know him as Pete the Planner) and I find he has some great ideas, advice and inspiration. I recommend that you read his blogs as well.
I wish you all a Happy Thanksgiving, Christmas, Hanukkah and whatever other holidays you might be celebrating this season. I hope that we are all able to remember that this time of year is not about the number of gifts under the tree, but is about the time spent with out family members and in our faith. At the same time I do understand that dealing with debt (especially during the holiday season) can be overwhelming. If you live in Indiana and are struggling with debt and considering bankruptcy I offer free consultations at the Carmel office of Halcomb Singler LLP where I can answer your questions about bankruptcy and debt and give my recommendation regarding whether you would benefit from Chapter 7 or Chapter 13 bankruptcy. Feel free to call me at (317) 575-8222 to schedule your consultation.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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ReplyDeleteThe realisation of funds usually comes from two main sources: the bankrupt's assets and the bankrupt's wages. There are certain assets that are protected, referred to as "protected assets". These include household furniture and appliances, tools of the trade and vehicles up to a certain value. All other assets of value will be sold. If a house or car is above a certain value, the bankrupt can buy the interest back from the estate in order to keep the asset. If the bankrupt does not do this, the interest vests in the estate and the trustee is able to take possession of the asset and sell it.
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