On Your Side: Handling Post Holiday Debt

GREENVILLE, N.C. (WNCT) - The holiday shopping may be over but many of us are now left facing the bill.

With all the extra spending, some people are entering the New Year with new debt.

The 2011 holiday shopping season gave a boost to retailers, but many people were spending money they don't have.

"One of the things we like to see in the economy as a whole is a lot of spending, unfortunately from an individual, personal level, a lot of spending is not so great,? said financial advisor Bill Pratt.

He says the biggest problem is people aren't budgeting.

In fact, according to the National Foundation for Credit Counseling, the majority of Americans have no clue where all they spend their money each month.

"January, they pull their statement up for the first time and look at the credit cards and it's unbelievable. Especially the small things like, I don't remember eating out that often, but if you don't budget at all you don't realize how much you've spent,? said Pratt.

So how can you can you tackle that holiday debt?

Pratt breaks it down into 3 steps:

1) Stop spending.

"If you received cash or gift cards, use those for impulse spending but use the rest of your income for paying off things you've already purchased,? he says.

2) Get organized - keep track of what you are spending each month and know exactly what you owe, and who you owe it to.

3) Keep making payments, so you don?t build up any more interest. Pratt advises taking them on one by one.

"Start making an extra payment or an extra amount of money towards a payment of one card and then once you've eliminated that credit card, you can take the money and use it towards the next and so forth,? he says. ?You just want to make sure your controlling your spending instead of credit cards controlling you at the first of the year."

Pratt also recommends keeping track of your credit report. You can do that for free here.

Source: http://www2.wnct.com/news/2012/jan/02/your-side-handling-post-holiday-debt-ar-1772173/

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