Planning, will power needed to climb out of a credit hole
It is estimated that the average American will spend close to $1,000 each on the holidays. To accomplish this lofty number, many of us have used a credit card more than we might like to make the holidays bright for those around us.
With most of the damage done except the billing, Jennifer Davidson says this is a great time to assess your own situation. Davidson is President of the Nebraska Council on Economic Education. She is also assistant professor of Economics at the University of Nebraska, Lincoln.
If you have a credit debt that is larger than you can pay in a very short term, Davidson says, you need a plan for the future. She suggests creating a separate saving account where you can regularly contribute money both to retire your debt, and save for next Christmas.
"Christmas comes every year, so it's no surprise," she says. "Adopting this kind of plan allows you to "pre-pay" for next year's spending."
Most important, if you find yourself in a credit hole, "Stop digging. Put the credit cards aside. Take them out of your wallet. Start to pay them off."