CAPC Debt Management Blog

Whew!  Christmas is over, things went off without a hitch, the kids are happy with their presents and there you sit with a pile of receipts and credit card bills that could sink the Titanic.  Ok, maybe it would only sink the S. S. Mino, but it certainly feels like the Titanic.  Don’t let your mounting debt paralyze your finanical mindset as you plan for 2008.  Time to put together a plan of attack and work that plan.  Here are a few tips to help you overcome your initial anxiety as you start planning the family budget for the months ahead.  You can can do it, you just need a plan.  Follow the 5 tips below and save your family from repeat servings of Ramen noodles in the coming months.

1. Take stock:  Now that Christmas is over, there will still be birthdays, showers, or special events coming up that you will need gifts for.  This is the time for re-gifting.  That great candle you got from Aunt Lucy or that bath set you got from Cousin Steve could be the next gift you give to a friend.  Re-gifting of nice, unopened gifts is a common practice and allows you to skip the hassle of returning.  Take all the gifts you will not use and place in a box marked “gifts” in your closet and pull them out as needed.  This will save you shopping time when such unexpected events comes up and will also save you money to use for necessities and bills.

2.  Cut up Store Rewards Cards:  That department store card you signed up for only to get the extra 10% off your purchase; will only keep you shopping there if you keep it in your wallet.  If there are no additional discounts with these store rewards cards you should cut them up now so you are not tempted to use them again in the future.  This will also help you to manage your cash flow and keep track of how much you owe on your main credit cards.  Having too many store rewards credit cards can lower your credit score and make getting additional credit in the future more difficult.  Cut them up now before they become a problem.

3.  Manage Current Credit Cards:  If you haven’t bought into the computer money management programs, then now may be the time.  There are many great programs out there that will allow you to set up separate accounts for each banking or credit account you have.  I recommend Quicken Personal Finance or Money from Microsoft.  Once you have set up all your accounts you should set up a schedule to enter your receipts into the program to help you keep track of what you have spent, what days the bills are due, and how much you owe on each bill.  This will help you take a look at your spending habits and manage your money better.  Read the rest of this entry »

With holiday spending in full swing so is its evil stepsister, credit card spending.  Recent stats by the National Retail Federation show that the 2007 holiday season is off to a record start with recent “Black Friday” sales by US shoppers rising 8.3% to a record $10.3 billion.  Figures for the following “Cyber Monday” shopping holiday, the Monday following Thanksgiving, also showed a healthy increase with a new one-day record of over $700 million in total purchases.

Unfortunately, most of this record consumer spending was paid through the use of credit cards.  Most consumers don’t hesitate to place $300 in goods on a credit card but certainly would think twice if they were forced to purchase the same amount of goods solely with cash?  It is thus no surprise that the average credit card debt per US household was $9,659 at the end of 2006 and is expected to rise yet again in 2007 as it has every year since the early 1990’s.

What will this rampant spending mean for the New Year?  According to John Silva, chief economist for Wachovia, “(Consumers) will still be spending money (in 2007) but it will be on credit card interest and minimum payments, not on apparel or eating out.”  Silva actually believes that the US economy may be heading towards recession in 2007 and puts the odds of such an occurrence at about 30% — certainly high enough to make most in the financial industry more then a little bit nervous.

What does this mean for you the consumer?  Add in the continued price of $90 oil,  the slide of the home housing market, an increase in the price of milk and the constant slide of the price of the US dollar abroad, and you get a continued difficulty for the average American both home and abroad in 2008.

We all want to give the best we can to our loved ones during the holiday season but doing so at the risk of your future financial sanity, may not be the best way for you to approach your holiday shopping this year. 

Remember!  If you feel hesitate buying that purchase with cash, maybe you shouldn’t be buying it in the first place.  Your 2008 credit card bill may just thank you. 

The holiday shopping season is here and with it, its inevitable companion, debt!  Who doesn’t overspend during the holidays?  Does it make it any better if that overspending is to the benefit of another?  We tell ourselves that it’s okay if our spending during the holidays is a little “out of control” if the end-result is a happy child, friend or family member AND we didn’t spend it on ourselves.  But is this really healthy?

According to the National Retail Federation, the average consumer spent a record $347.44 per person during the recent 2007 Black Friday holiday shopping event.  This is a marked increase of 4.8% over last year.  Add to that fact that the average family of four here in the US spends between $4000-6000 during the Christmas season and you can see how debt can accumulate quite rapidly during the old holiday season.

So what can you do?  How do you give your loved ones that “Christmas to remember” without getting yourself into knee-deep debt in the New Year?  Consider these 6 tips to debt proof your life this holiday season and start your holiday season out on a solvent foot.

1.  Cut your spending:  Seems simple enough.  If you spent $2000 last year, try to spend $1000 this year.  Not that easy to do though is it.  Mom and dad must have that new top of the line juicer and who is going to buy little Johnny that PS3 if not you?  Don’t consider eliminating the purchases all together, but if you can’t find a great comparison shopping deal on the items you’re looking for, then maybe something similar and cheaper may be the way to go.  Buy mom and dad a mid-range juicer and get little Johnny a Nintendo Wii - it’s cheaper and the better system anyway.

2.  Get organized:  So how many presents do you really need?  If you’re anything like me, I tend to always be surprised with unexpected gifts that need buying on a regular basis. Uncle Larry and his 4 kids are going to be visiting this year, no kidding?  Learn from my mistakes.  Make that list and check it twice - cut some people if you have to.  Plan a budget and stick to it and find out now who is coming and what needs to be bought if anything.  As for Larry and his 4 kids, consider a fruit cake or a popcorn variety mix can.  That will work well within your budget.

3.  Give an experience:  Thing outside the box this holiday season. Give your loved ones the gift of time.  Be creative and watch your holiday expenses plummet.  Give mom and dad a weekend of your undivided attention (or if they are like my parents, offer to disappear for a week altogether).  Take little Johnny to the zoo or plan a family holiday outing to the bowling alley.  Get creative and slice your expenses in half and reduce your gift giving stress at the same time. Read the rest of this entry »