Even though it was decades ago, Mary Hunt vividly remembers the shopping trip that became etched in her memory as part of the worst Christmas ever.
Every credit card was maxxed out to the limit, but she hadn’t completed her shopping. With just a week left before Christmas, she managed to beg one card issuer to raise her limit. Unfortunately, it was a card from a high-end retail store with a limited selection of expensive electronics and toys. She forged ahead anyway. Among her purchases was a $600 VCR that she could have bought elsewhere for about half the price.
She recounts her holiday shopping spree in her book, Debt Proof Your Christmas: Celebrating The Holidays Without Breaking the Bank:
I tore through that increased credit limit in no time flat. I bought toys and clothes and of course the pricey VCR. The kids weren’t impressed; neither was my husband. He couldn’t quite understand my choice of gifts because we already had a VCR — but not a very good one, I pointed out.
I don’t remember much else from that miserable Christmas. If there was any joy or satisfaction it was lost in the shadow of the frantic last-minute shopping and all the debt I added to an already out-of-control situation.
Mary’s story eventually had a happy ending, though that must have been impossible to see at the time. Not long after that holiday season, she and her husband began a 13-year journey of digging out of $100,000 in credit card debt. She has since gone on to write dozens of books and runs a successful website, Debt-Proof Living.
“If there’s one thing I learned from that Christmas so many years ago, it is this: stuff quickly fades, but debt goes on and on,” she writes.
David Bakke’s holiday debt debacle, on the other hand, began not out of desperation, but rather as a result of the good fortune he was experiencing:
Just a few years back, I received a hefty salary increase late in the year and a nice Christmas bonus check from my employer. I had always maintained a fairly conservative mindset in terms of my spending, but because I had just received such an influx of cash, I was off to the races when it came to holiday shopping. It was nothing but top-of-the-line stuff for everyone on my list. While it was fun shopping for all of this, getting the credit card bills in January was not. What made the problem worse was that I had spent my entire bonus check on celebrations during Christmas and New Year’s Eve.
Although my raise was significant, it did not increase my weekly paycheck by that much. I ended up with credit card bills of more than $2,000 that I couldn’t pay for.
Like Mary, David’s story ends well. He buckled down, paid off his debt and now shares his financial strategies with readers on MoneyCrashers. How did he do it?
This was quite an eye-opener, and I immediately put a plan in place to pay off these debts. First, I vowed never to go on a spending spree like that again. Next, I started clipping coupons to save on groceries, and I also pared back on all of my monthly services including cell phone, Internet, and cable TV to save even more money. I also sold a bunch of my unneeded items on the Internet for some extra cash. I kept track of all of this, and used the extra cash to pay off my balances. Luckily, I was able to pay off all Christmas-related purchased by around the middle of April. And as I said, I will never go through that again. It was definitely a lesson learned.
Have you had a holiday season that left you with a debt hangover? Or do you have a strategy that helps you spend more sanely during the holidays? Share your comments below.
Image: Chris Kelly, via Flickr