A lot of people go on summer vacations to the beach, visit theme parks or dine out more frequently during the warmer months. Overspending in the summer often leads to massive credit card debt. When getting a second job or cutting back on day-to-day spending doesn’t put a dent in what you owe, consider debt consolidation. According to an article by hngn.com, it’s common for people to splurge in the summer. A survey by Experian shows a lot of Americans run up credit card debt in the summer. If you don’t tackle your debt as soon as possible, you could end up in a worse predicament during the holidays. By getting on a debt management plan before the holidays roll around, you will already have a financial survival plan in place. Part of consolidating your debt is receiving general credit counseling so you budget and plan for vacations, gifts and summer camps.
Hold off on using Credit Cards
When you consolidate debt, you hold off on using credit cards until you pay off your debt. A trained credit counselor will help you deal with your creditors. In many cases, your creditors will drop any late charges and penalties as part of the debt management plan. With credit counseling advice, you will have no problem living without credit cards. Since you know what the payoff date is for your debt management plan, you can plan better for the future.
Budget for Different Scenarios
Your budget while on a debt management plan is not exactly the same as your budget after you pay off your credit card debt. With the plan, you make one monthly debt repayment. Most people take the same amount for their monthly debt management bill and automatically move it into an emergency savings or retirement saving fund. Once you learn to live on less than your full paycheck, you don’t miss the money. Some experts believe the key to success is automation. Set it up so your debt management plan payment gets deducted automatically each month. Once you can afford it, set up an automatic contribution to a 401(k) or other retirement plan.
Plan for next summer
Even if you went too far with spending this year, you don’t need to repeat the spending cycle every year. Break the pattern by going on a “stay-vacation” next year in which you check out the local sites and attractions for less money. Visit relatives who will provide complimentary accommodations or let you stay in their home. You can also plan ahead for next summer by finding deals for airline tickets and other deals. Another option is to vacation during the off-season.
By consolidating your debt and adopting good financial habits in fall, you prevent an even greater problem of relying on credit cards to get through the holiday gift-giving season. Although spending for the holidays is fine, it is best to plan and save.
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