Pre-Holiday Debt Preparation

Well, the holiday season is almost upon us. Over the next few months, we will be consumed with thoughts of rich food, presents for family and friends, and travel. The issue underlying all of this is money - how will we find the money to pay for all of our holiday expenses.

Every year millions of Americans go into debt during the holidays. We overextend our credit cards to pay for presents for our families, and we borrow even more to treat ourselves to a little bit of holiday comfort. Ski trips, beach trips and holiday get-togethers can wind up costing consumers big money.

The real problem with all this holiday spending is that it usually takes months for consumers to pay back the debt they borrow. You can end up taking all spring and summer to repay what you borrow over the winter. By the time fall rolls around, the holidays are upon you again and the cycle starts anew.

Ah, debt through the seasons.

For most consumers, the cycle of borrowing for the holidays and repaying over the year is a necessity. Very few people have the cash on hand to cover all the necessary expenses every winter.

Over the next few months, we will be writing articles covering ways to scrimp and save on holiday expenses, so check back often to learn more. If you have your own suggestions for keeping out of debt during the holidays, please comment about them in the box below.

Here is a short list of tactics you can use to prepare financially for the holidays:

• Debt consolidation with a balance transfer. This means moving your high-interest debt to a credit card with a lower balance and a lower interest rate. This frees up space on one card if you need to use credit for holiday expenses, but be careful: balance transfers can be costly in the long term.
• Home equity line of credit. Your mortgage lender might extend you a line of credit borrowed against your home equity. HELOCs usually have a much lower interest rate than credit cards and generally have more favorable repayment terms.
• Credit counseling. If high-interest debt is eating up all your finances, and you are unsure how you can make ends meet this year, a credit counselor can be of great use. These professionals offer budgeting advice and savings tips, and can help you put your finances in order.

It’s never too early to start preparing for the holidays. The sooner you get your act together, the less likely you will be to fall behind on your finances during the expensive holiday months.

Author Bio: Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on Debt Management, Credit Management and more.