The Ghosts of Purchases Past: A Consumer Debt Christmas Carol

During the stressful holiday season, loads of consumer debt can feel especially haunting… The holiday season is a time for many things. There’s hanging stockings by the chimney with care. There’s chestnuts roasting on an open fire. And there’s also a lot of spending. After all, gifts cost money, as do plane tickets and ugly sweaters and egg nog and cash bribes for Santa. For people saddled with loads of consumer debt, it can leave them feeling like Ebenezer Scrooge, haunted by the spirits of their past misdeeds.

But A Christmas Carol also has an important moral. Scrooge might not have been able to change his past, but at the end of the story he does set out to change his present and his future. With that lesson in mind, here are seven steps that people can take to put their finances in order and banish those pesky poltergeists of debt.

  1. Ask For Help Financial woes are embarrassing. Who wants their friends, family and co-workers to know that they’ve made mistakes with their money? But keeping it to yourself isn’t going to help. So take a deep breath, summon your courage and talk to people about it. Look for experts, too. The internet is a treasure trove of information on how to consolidate and pay off your consumer debt. Just tell yourself that you’re “crowdsourcing” more information on improving your finances. “Crowdsourcing” sounds cool.
  2. Budget Budget Budget Budget Budget. Seriously. Because in order to take control of your finances you need to take control of your spending, and in order to take control of your spending you need to know how much you spend. When that cashier asks you if you want a receipt, you say “yes.” Record everything you spend in a month and break it down into different categories like “groceries” and “entertainment” and “transportation.” You might be surprised to find that “coffee” deserves a category of its very own.
  3. Decide What You Can Live Without Remember that entire category dedicated to coffee? Once you have a record of how you spend your money, you can start deciding how to spend your money better. Things like coffee from Starbucks or lunch from the food truck near your work are prime areas for cutting back. Also, take a long hard look at your cable bill or your Netflix subscription. These are things that you might like—you might really, really like—but they are not things that you need. Those past seasons of Scandal will just have to wait. Once you’ve cut out all those expenses, readjust your budget and stick to it.
  4. Increase Your Income Want to get your Netflix back? You can pay off your debt even faster by increasing your income. This might mean getting a second job, like delivering pizzas or waiting tables. It could also mean donating plasma, signing up for medical studies, starting a side hustle or babysitting. Buying lottery tickets doesn’t count.
  5. Start Tackling Your Debt… Now that you’ve trimmed your spending and increased your income, it’s time to start paying off your debt. There are different debt repayment methodologies out there, like Debt Snowball and Debt Avalanche. Decide which method works best for you. It’s a good idea to see if you can consolidate your debt through obtaining a personal loan. That way, you only have one bill and one due date to worry about instead of several.
  6. …But Still Build Your Savings. Things like unexpected medical costs can quickly undo all your hard work. So building your savings should go hand-in-hand with paying off your debt. The ideal amount to have is somewhere around 6-months-worth of expenses. That’s probably not realistic in the near future, but you need to start somewhere. Try building up an emergency fund of $1,000. Be warned, though, that you might experience an odd sensation. It’s called peace of mind. Don’t worry. It’s a good thing.
  7. Buy Tiny Tim A Plump Christmas Goose. Just kidding. Is Christmas goose even a thing anymore?
  8. (For Real This Time) Don’t Beat Yourself Up.Look. Being in debt sucks. Maybe it was due to circumstances out of your control, or maybe it was due to spending that you let get out of control. Either way, there’s no use beating yourself up about the past. The less time you spend kicking yourself for past mistakes, the more time you will have to make a budget, find a second job, apply for a loan and cajole your friends into letting you use their Netflix login for free.

Don’t let the ghosts of purchases past ruin your holiday season. If Ebenezer Scrooge can change, anyone can.

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