Dear Barb—Credit, COVID, and Christmas

Dear Barb:

Well, I survived Christmas.  It was a difficult Christmas since I couldn’t spend it with my family.  My boyfriend and I live together, so we spent Christmas alone.  I was hoping that I would be spending less money with the virus limiting visits, get togethers, and shopping, but nope, it didn’t.  In fact, I spent more money this year.  What I didn’t spend on entertaining I spent on ordering food and buying lots of wine!  I bought gifts for my family online and had them delivered to their homes, which seemed like a good idea, but I ended up losing track of how much I bought for each person and spent a lot more than I planned to.  I avoided looking at my credit card payment until this week.  Wow! I was floored; I probably spent twice as much as I did last year.  Now I’m stuck with this big credit card payment and both me and my boyfriend had our hours cut because of COVID, so we are in a bad situation.  I am looking for advice on how I can get ahead of this so it doesn’t happen again next year.  Thanks, Miranda.

Hi Miranda:

Every January I get letters like yours, so, even without covid, most of us spend more than we should.  We spend too much at Christmas, thinking our gift represents the love we feel for the person, but that is not the case.  Gifts and money should not be an indication of how much love we feel for a person.

Now that you have gotten into this situation, you have to find your way out.   Begin by prioritizing your debt.  You need to work on paying off your credit card and high interest debt first.  When you have your debts paid off, you can begin to save money for next Christmas.  Open up an account just for Christmas and make monthly deposits.  It’s important that you don’t deposit too much money and not have enough money for your monthly expenses, then use your credit cards.  Save only what you can comfortably.  Whatever you have in that account by next Christmas, is what you can spend on gifts and entertaining.  You have to be disciplined and not spend more than you have in that account, no matter how tempted.  If you get a bonus, or refund on your income tax, add some that to your Christmas account.

It’s all a matter of living within your means, not always an easy task, but it is attainable with a little discipline.  Thanks for your very timely email Miranda.

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