Each year around the holidays we write an article that has to do with consumer spending. This is because there is a significant amount of money spent between Halloween and Christmas. Many shoppers spend beyond their means, which is an area of concern. There’s something about this time of year that tempts folks into digging so deep into their pockets that they’re unable to pay it all back.
There are unpleasant financial consequences to spending more than we earn. Building excessive debt over the holidays may prove difficult to pay back later.. Also, incurring debts to close to filing bankruptcy can be seen as fraudulent behavior. For example, gift purchases over a certain amount can be considered as “luxury” goods which means they may be considered non-dischargeable.
For the first time in history, 2019 total retail holiday spending is expected to be over 1 trillion dollars. Year over year, Black Friday and Cyber Monday are showing massive growth. Consumers are using their mobile phones more than ever, possibly making impulse purchases easier and quicker. As folks are shopping more online, and spending more, costs will add up quickly.
Financial Data Shows Costs Add Up Quickly
Treat yourself, but watch the budget! In previous years the average American would personally spend about $1,000 on holiday gifts. Often times, gifts are purchased on credit. Low gas prices and tax breaks can provide some relief. However, spending often continues without notice. If you travel by plane, or host holiday parties, expect to add those costs to the total. Without tracking spending, many little things add up. When financial data analysts predict a year is going to conclude with massive consumer spending it results in the inability to pay off debts.
Overspending During Holiday Is Easy To Do
Beware of Credit Cards Piling Up
Excessive credit card debt is one of the leading causes of bankruptcy. Avoid putting purchases on credit cards without considering how difficult it may be to pay back. Credit cards carry high interest rates. If the balance can’t be paid off in its entirety, then the items purchased end up costing significantly more in the end. Department and big box stores will temp consumers to open new cards to take advantage of special offers. Be aware of the risk vs. benefit. The best scenario for holiday spending is not to by now and pay later, but instead to plan and budget within the means of your household.
Holiday debt is in addition to debt and expenses you already have such as a mortgage, rent, car payment, groceries and gas. Once the hype of the holidays is over, many consumers are left wondering how to pay these additional bills off. If you had been leaning towards filing bankruptcy, it’s especially important to be cautious about holiday spending. For information about bankruptcy options including how to eliminate debt, talk to a Wisconsin bankruptcy attorney. The experienced bankruptcy attorneys at Debt Advisors can steer you in the right direction.
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