As we enter the holiday period it is easy to get all philosophical on life, but I will spare you those thoughts.
What I want to remind you all of is the imminent flood of stories and media articles about the personal debt blow out as consumers we will suffer. Every year the same stories get rehashed and the financial experts like myself come on and provide the predictable lecture. My first question to you is why do you do it? Secondly, what are the consequences?
Why do we do it? Well if you remember my previous blog, the lure of instant gratification, as consumers we have been trained to spend, especially at this time of the year. We have to battle smart marketing companies who know how to pull our emotional levers to get us to part ways with our hard earned cash, if we don’t have the cash they create ways for us to find it through personal debt. Which is great at the time, the kids get what they want, the family gets what they want, but does the boring old financial situation get what it wants? Not only this but we become lazy, we don’t bother trying to change. However if you don’t initiate change sometimes the consequences can be great such as whether you want to have flexibility, creativity and freedom in your life or if you are happy living day to day. Now for some you aren’t happy, but can’t see the light at the end of the tunnel. Do the hard yards, it may be a 5 year plan, but honestly at the end it will be worth it.
So after this Christmas I want you do a few things if you want to initiate change.
Step 1 work out how much you want for Christmas and birthdays in 2015 and include that as expenditure for 2015, include it in your budget, start putting that money away.
Step .2 create a budget by yourself, or with yourfamily. If you don’t know how to budget use someone that does.
Step 3 yes you now have more debt than 6 weeks ago but lets not give up, after your budget shows extra cash you can find, put it onto your credit card or personal loan, any extra payment will save you interest, that is dead money, start with the highest interest rate debt mechanism and work down.
By implementing these strategies you will have a better understanding where you are sitting financially and what you need to do to change. Worst case scenario, you won’t add to the debt in 2015 as you would have saved for those presents in advance. The consequences for not changing our ways is an inability to do what we want, perhaps that could be upgrading to a bigger house, or getting a new car, or having the freedom of living life how we want too, so act as efficiently as you can.
Have a great Christmas period, drive carefully and enjoy time with your family, friends and loved ones.