Los Angeles Debt Can Snowball Near the Holidays
The spirit of the holiday season so often moves people to generosity.
This is great – except when they really can’t afford that generosity in the first place.
Our Los Angeles bankruptcy lawyers tend to see an influx in clients just after the holiday season‚ as people realize they have become overwhelmed with debt.
Of course‚ holiday shopping is not typically the only issue. Many of these folks may already have been grappling with medical bills or student loans or a sky-high mortgage payment. But the holiday shopping sprees serve to exacerbate those problems‚ especially because it’s understandable this time of year to want to pretend they don’t exist.
According to the national Retail Federation‚ approximately 150 million people were planning to shop the deals on Black Friday weekend. The NRF is also forecasting that holiday sales through this month and last is going to spike by over 4 percent above what it was last year‚ to somewhere in the neighborhood of $586 billion.
Many of those people simply can’t afford to spend the money. We would even wager a guess that at least half of those purchases will be made on credit.
Now‚ credit isn’t a bad thing‚ and neither is holiday shopping or wanting to be generous with your loved ones. But it may be time to address whether you can actually afford it.
Washington Post Commentator Michelle Singletary advises shoppers use the “fire drill” method to curb unnecessary spending. That is: stop‚ drop and roll.
- Stop. This means give your self a moment to think before you put anything on a credit card. Approximately 30 percent of holiday shoppers reported that they planned to put a purchase on a credit card. This is probably a low estimate because it’s self-reported. But as Singletary noted‚ “Just like running while on fire‚ continuing to use credit will make things worse. You fan the flames.”
- Drop. This refers to the attitude that your loved ones will somehow be deprived if you don’t go all out for the holiday. You may not be able to bear avoiding a gift entirely‚ but at the very least‚ drop the big ticket items from your list.
- Roll. Roll right past the stores‚ the malls‚ the outlets – all of it. If you go there – even just to check out the lights or to people watch – it can be far too tempting. If you need to‚ make one single trip‚ and make that the only one.
Other strategies you might employ include making a list – checking it twice to make sure you can afford everything on it – and then sticking to that list to ensure you don’t overspend.
Keep in mind that when you pay with credit cards‚ you tend to overspend‚ as you aren’t seeing the cash physically leave your hands.
Secondly‚ try to stay offline if you can. This is a tough one because it’s difficult to avoid. But Business Insider reports that those who purchase items online spend 22 percent more than those who buy items in store.
And finally‚ if you do become overwhelmed by your debt‚ call us today to see how we can help.
If you are facing bankruptcy in Los Angeles‚ contact Nader‚ Naraghi & Woodcock‚ APLC to schedule your free consultation. Call (800) 568-0707.
Michelle Singletary: A fire drill to curb holiday spending‚ Nov. 20‚ 2012‚ By Michelle Singletary‚ the Richmond Times-Dispatch