After-Christmas Debt – Is It Time for a Reality Check?

We’ve all been there – the shopping craze of December, looking for those perfect last few gifts, making sure there is enough food in the house for your holiday guests, decorating your home inside and out.

As if paying for these things weren’t enough, there are hidden expenses as well. Shopping can take time out of your work schedule – and it takes gas, too! You eat out more in December, while you race around to stores. If guests are coming, you may even embark on renovations to your home (that second bathroom sure came in handy) or new furnishings (Aunt Bea appreciated the pillow-top mattress).

So, in the end, your estimate of a few hundred dollars of extra holiday expenses has easily become a four-figure matter.

You are not alone! There is something about the holidays that we just get caught up in. But then January comes, and suddenly it’s time for a reality check.

Now that the bills are coming in, do you feel distressed? Well, that’s natural – but are you losing sleep? Are you more worried than you were, say, last January?

January is the time when many people realize they are just not keeping up with their expenses. It may also be a time when you begin using strategies to hide from that reality – strategies that only work for a short time before you begin to get worried again.

Signs that your finances might be suffering

Here are some signs that your finances are suffering from more than simple holiday overspending:

• Using one credit card to make the payment for another credit card (this is one of the “coping” strategies that is a red flag)
• Using credit cards to pay for basic necessities (rent, food)
• Finding it impossible to save money anymore
• Having cards that stay maxed out for month and months
• Realizing that much of your monthly income is being consumed by interest
• Finding you can’t pay all your monthly bills

If you noticed any of these danger signs before Christmas, chances are they haven’t improved. And if they are just developing now, since Christmas – take heart, because the sooner you take action, the easier it will be to remedy your situation.

I have been in the same boat

In early 2009, after at least a year of experiencing the first five signs above, I realized that there was no way I would be able to pay all my monthly bills. Christmas had pushed my finances over the edge.

It was only at that point that I decided to do some research online, which led me to book a free appointment with a Trustee. The appointment went very well! In fact, I wished I had gone in earlier – since I had already been worrying for several months.

The Trustee explained to me that the earlier a person comes in for advice, the more options they are likely to have.

Trustees are familiar with many debt solutions – from better household budgeting, to leveraging the equity in a home, to debt consolidation, to Consumer Proposal, to Bankruptcy. Once you describe your situation to the Trustee, he or she can outline your options and you can discuss what will work best for you.

So – do you feel in over your head after the holidays? Losing sleep worrying about how to pay your debts? I recommend you make a free appointment to see a Trustee. There’s no risk – except the risk of sleeping better! And that’s a risk you should be glad to take.