The holiday decorations are put away and the vacuum cleaner has finally sucked up that last pine needle. One last reminder of the holiday season remains - your credit card bills. The following tips will help you create a realistic plan to pay off last year's bills and start preparing for the 2011 gift-giving season.
Time to Pay the Piper
Now is the time to buckle down and start paying off the credit cards that you used during the 2010 holiday season. Figure out how much you owe and divide that number by five. For example, if you put $1,000 worth of gifts on your credit card last year, you will need to pay $200 a month if you want that bill paid off before the end of summer. This means you need to figure out how you can reduce your current spending by $200 a month to pay for last year's holidays. If you don't pay off that credit card soon, not only will your holiday bills be with you next year, so will the interest they've accrued.
Ask your family and friends if they can remember what you gave them for the holidays. Even though it was only a few months ago, I bet they can't tell you exactly what gift they received from you. This might seem a little ungrateful to you, but it's so easy to forget things like this in the rush of the holidays. Now ask the same group of people about their favorite memory from the holidays. Instead of opening gifts, their answer will likely revolve around enjoying the time spent with loved ones. This should be a reminder that holidays are more about relationships than exchanging gifts.
Start Planning For Next Year
Believe it or not, now is the time to create a holiday budget for 2011. Create a list of the people that you want to buy gifts for and decide how much money you want to spend on each person. Add up these amounts and divide this total by 10, since there are 10 months remaining in 2011. This is the amount of money you need to save each month to achieve your holiday spending plan. Start setting this money aside in an envelope, Christmas Club, or separate savings account. If you can't comfortably put this money aside each month, adjust your gift plan to an amount that you can commit to.
It's odd to start financially planning for the holidays soon after the decorations are put away, but a little planning up front can result in some holiday cheer at the end of the year. Remind yourself how great it will feel to pay for all of your gifts with cash during the holiday season.