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Thursday, October 17, 2013

Establishing Your Holiday Budget Now Can Help Credit Card Debt Later


By: Peter J. Lamont, Esq.
New Jersey Business and Personal Law Attorney
Law Offices of Peter J. Lamont

With the holidays fast upon us, now is the time to set down a budget for this year's celebrations. And as hard as it may be - it is imperative provisions be made to ensure the budget is adhered to.
A little forethought now will result in a much happier spring and summer, when traditionally bankruptcy filings are at their peak. Typically the bulk of debt being discharged is credit card debt - much of it accumulated over the holiday period when goodwill, high emotions and cost-be damned attitudes run rampant. While these feelings may lead to the immediate gratification so desired in these tough times; it must be remembered there are consequences, too often forgotten or disregarded in the fervor of the season.
While a budget foremost in a shopper's mind will not ensure compliance, a little accountability may. Getting a friend or family member to provide oversight prior to shopping will help. The shopper may even want to bring this overseer along on shopping trips. As well, make arrangements to report to the "budget cop" on the progress of the shopping.
Be inclusive in the budgeting. Include all reasonably foreseeable expenses - gifts, food, decorations and travel expenses.
Emotional detachment is essential in this process. Talk to family and friends who are typically recipients and explain the situation. If necessary, set spending limits with such people. It is of paramount importance to detach when considering a gift for children and other loved ones; too often fear of disappointing or hurting someone will lead to overspending.
Budget your shopping time as well. No last minute shopping as it is too easy to disregard spending limits, particularly when shopping the night before a gift is to be given.
Plan ahead, trying to have in mind what purchases will be made. Attempt to foresee all the expenses that will be encountered but do budget money for unforeseen items. Set these emergency funds aside to remove the temptation to spend it elsewhere. If an emergency does arise, talk to your overseer and brainstorm ideas to minimize the impact of the expense. Often a well thought out solution is a less expensive alternative to a knee-jerk reaction and can be easily missed if you are under pressure to resolve an emergency.
If at all possible, leave the credit cards at home and try to buy with cash. If this is not realistic, consider getting a loan from a bank where interest rates are much lower and repayment terms are flexible.
If credit cards are used, pay them off as quickly as you comfortably can, making payments larger than the required minimum.
Keep records of spending and review them regularly with your budget cop regularly. This will help in keeping you on track.
A little thought and planning will go a long way to provide for a wonderful holiday season .
If you would like more information about this topic or have general legal questions, please feel free to contact me at (973)949-3770 or via email at plamont@peterlamontesq.com We answer legal questions on a daily basis and would be happy to discuss any issues or questions that you have with you.  Offices in: New Jersey New York, Colorado & Puerto Rico.  Affiliated throughout the country.
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