January 13, 2010

Escape from the New Year Debt Trap

I think there is something rather weird about Christmas. You spend days if not months planning for it – but the day itself disappears in a flash. And every year there is something that comes back to haunt you. This is money – or a lack of it.

There seems to be a sinister plot to get us to pay for more of everything at Xmas. More food, more drink, more clothes, more presents. And of course – more and more lovely debt. Much more debt.

Every year I make a resolution not to get into debt at Christmas. And every year, as the bills roll in throughout January I remember that I have failed in that aim again.

And another thing. All those gifts and gizmos that seemed so desirable in the run up to xmas suddenly seem a bit useless and inconsequential. So if you want some great debt advice from somebody with a great deal of experience in these matters…. Don’t buy too much before xmas!

The very worst thing you can do is load up your credit card. Because that way you’ll be paying for xmas forever. Some people find that personal loans work, either to pay for xmas – or to pay for the credit card. Again you might think this is a good idea if you listen to the banks – but as ideas go, it is a real stinker.

You see the trouble with any loans is that ultimately you have to pay them back. And you have to pay them back without getting further and further into debt. Few of us can manage that trick.

So the most reliable money advice that money can buy is to stick within your means. If that means Xmas is not quite (or even nowhere near) as extravagant as in previous years – well so much the better!