Jan 13, 2009 4:43 pm US/Eastern
3 On Your Side: Holiday Debt Hangover
PHILADELPHIA (CBS 3) ―
The morning after a big party is tough for many people and some say the month of January is very similar. It can be a real wake up call after tying on some debt during holiday shopping. It's kind of like having a holiday debt hangover!
Those shopping splurges are distant memories and now you're back to work after time with family. The bills are now arriving, one by one, sobering you up with a real wallop on your wallet.
Alexandra Lieberman knows how you feel. She tried to be good, but holiday spending combined with old debt really added up.
"It was everything. It was groceries, going out to dinner, shopping, everything," Lieberman said.
Statistically, January bills tend to be bigger than any other month for many of us; sometimes two to three times larger than expected.
So what's the remedy?
Avi Karnani and Ori Schnapps run
JustThrive.com, a free financial planning website. They say first, get personal with your paperwork.
"This is a really good time in the beginning of the year to organize your financial life for the rest of 2009 and you can start off with some good habits. You can get to know all your terms and fees on your different credit cards and your accounts," Karnani said.
It's more important than ever with the current credit crunch to know when your payments are due, or you could pay dearly with higher interest rates.
"Banks are less forgiving of your mistakes," Schnapps said.
Money may be tight, but try to pay more than your minimum or you may not make a dent in the debt.
"You go out and you buy somebody a gift, that gift is going to cost three or four times as much if you just pay the minimum," Karnani said.
Also figure out when your zero percent interest rates expire and plan accordingly. You can also help pay down the debt by returning things you purchased to use as gifts but didn't give away. In that case, stores will typically credit your account if you have a receipt.
Related Links:
www.JustThrive.com
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