Tips to get out of holiday debt


Published: Monday, January 8, 2007 at 6:01 a.m.
Last Modified: Sunday, January 7, 2007 at 11:29 p.m.
The January credit card bills are looming. Now what? No matter how doggedly we tried cutting back our holiday spending, the unanticipated $50 gift here and there really added up.
This month, we'll literally be paying for those last-minute purchases, plus the inevitable after-Christmas impulse buys. Here are 10 ways to get back on track and reign in the shopping budget for 2007:
  • 1. Sell gift cards According to the National Retail Federation, Americans were expected to receive gift cards totaling more than $20 billion for the holidays. But what should you do if you have a $100 gift card to a store you dislike?
    Such cards are rarely redeemable at stores for cash. But at www.PlasticJungle.com, you can sell your unwanted gift cards or trade them for gift cards to stores you prefer. (If you're hurting for cash, it's wise to use this newfound wealth to pay the bills. Time's up for any gift card lingering from last Christmas - it's definitely time to use it, sell it or trade it!
  • 2. Sell stuff on eBay.
    It may be too chilly for a yard sale, but it's a great time to purge your unwanted gifts, unworn clothing and other semi-valuables on eBay.
  • 3. Plan for sales.
    Certain annual sales are predictable. January is a good time to buy sheets and towels, not to mention winter gear and holiday items at discounted prices. Mark these sales on the calendar as a general guideline. February brings consumer electronics, coats and cashmere. March is spring clothing and wedding gifts. April means wedding gowns, and May is gifts for Mom. June is gifts for dad; July, summer clothing and shoes; August, fall clothing and school supplies; September, fall clothing, outdoor sporting goods and patio items; October, cars (as new models arrive); November, early holiday gifts; and December, fall merchandise, sweaters holiday decor and winter gear.
  • 4. Watch a movie.
    Will Smith's current flick, ''The Pursuit of Happyness,'' will have you thinking twice about spending $5 on a latte. You can't help but ponder how you'd fare for months without a paycheck, and how much we take for granted.
  • 5. Track your spending.
    Every $2 soda and vending machine snack adds up. For at least one full month, track every penny you spend. This works best using an Excel spreadsheet, but just jotting dollar amounts on a daily planner, purse-sized notebook or index card will help you visualize exactly where your money is going. Add up everything you didn't need, and make note of it. While you're at it, estimate your annual shopping expenses for things such as birthday and wedding gifts in 2007. Knowing you have $XXX expenses can help prevent $XXX purchases.
  • 6. Ditch the plastic.
    If you have a credit card balance larger than your checking account, it's time to cut up the plastic - at least until you can pay the full balance off each month. If it helps, calculate how much you've paid in late fees and interest to your credit card company in the past year, then imagine ripping up a pile of cash in that amount.
  • 7. Stay busy.
    You know that cooking or tap dancing class you've always wanted to take? The scrapbook you've been meaning to finish? The soup kitchen where you planned to volunteer? Sign up. Keeping busy - preferably on your typical shopping-spree days or nights - can keep you away from the mall.
  • 8. Buy nothing for a day.
    Started as a social protest against consumerism, Buy Nothing Day is traditionally observed on ''Black Friday,'' the official holiday shopping season kickoff. Just pick a day - any day - and try to make it through all 24 hours without spending a penny. Not on food, not on gas, not on breath mints, not shopping online - nothing. If you do have to buy something, only use cash (yours, not someone else's). This is another exercise in restraint that can help reign in spending.
    For a little more fun, invite a friend or colleague to a buy-nothing-for-a-day challenge.
  • 9. Save more.
    If you don't have it, you can't spend it. So start funneling more into savings. Your bank can automatically divert any amount from your direct deposit paychecks to one or more savings accounts. To start try $20 a week. By the end of the year, you'll have socked away about $1,000 without much pain. You can even start several special savings accounts - ones for gifts, another for traveling expenses, etc. - so the year-end holiday bills aren't so overwhelming.
  • 10. Pack a lunch.
    Eating at a sit-down restaurant, fast food joint or even in the workplace cafeteria adds up. Let's say you spend $7 a day on lunch five days a week. That's $140 a month! Just packing ONE lunch a week can save $28 a month, or more than $300 a year! Plus, you'll likely consume fewer calories with a packed lunch than at, say, an all-you-can eat Mexicantown buffet.
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