Archive for Overspending

Help! I Overspent On Christmas!

Buyer’s Remorse after Christmas?

It’s easy to go overboard for Christmas. Giving extravagant gifts to your family members seems like a great idea…until you’re facing a huge credit card
bill in January.
 
However it happened, approach this problem rationally. Blaming yourself is pointless; the important thing now is to right yourself financially.
Fortunately, you’re not facing this alone. Section 705 Federal Credit Union is here to help. Check out these four ways you can patch up your finances and have things right before summer.

1.) Budgeting adviceYour CU: personal loans, budgeting advice, debt counseling, and refinancing major purchases.

It’s very tempting to make only the minimum payments on the credit card you used to buy Christmas. Unfortunately, it’s also the best way to ensure you’re in debt for every Christmas to come.
 
Making minimum payments on credit cards prolongs the length of time you’re in debt and spikes the total amount you pay, adding an extra $175 to a $10,000 balance at 21% APR.
 
What you need is an aggressive debt repayment plan. Instead of looking to pay the smallest amount possible, identify the most you can afford to pay. Section 705 FCU can help with informative guides and worksheets on household budgeting.
 
Commit to an extreme budget until you make headway on the debt. Coming up with an extra $35 or $50 a month is tough, but it’s the easiest way to get things moving.

2.) Refinancing major purchases

If you splurged on one or two major purchases, it may not be credit card debt you’re facing. Slick car dealers offer crazy-sounding incentives to entice people to give cars for Christmas. Unfortunately, when you realize you’re in over your head with a car payment, there’s no undoing the deal.
 
Section 705 Federal Credit Union can help. Our auto and other major purchase loans often feature rates that are better than dealerships. You may need to finance the purchase over a longer term, or you may need to restructure the loan to pay less now. Either way, you’ll find more favorable and flexible terms at with us than you will at the dealer.

3.) Debt counseling

Does reading those credit card statements fill you with despair? The credit union can help you make sense of them.
 
Make an appointment to speak with a debt counselor through Section 705. You’ll learn about your rights and responsibilities and create a realistic plan to pay off your debt and avoid falling into the same trap next year.

4.) Personal loans

Instead of making dozens of minimum payments, focus your debt into one manageable plan through a debt consolidation. Amazingly, taking this step can save you money in the long run by lowering your interest rate and monthly payment commitment.
 
Collateral isn’t necessary. All you need is some basic personal information and a willing partner. Our loan specialists can help you organize and simplify your payments, working toward a debt-free life.
 
 
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How Not To Bust Your Holiday Budget

Christmas tree with presents underneath it

Holiday Budget Tips

According a T. Rowe Price survey, more than 50% of parents will aim to get everything on their kids’ wish lists this year. Many of these parents will be paying for these gifts for months, or even years, afterward.

There’s a better way, and it’s simple: create a budget, and make informed decisions about your spending before you hit the shops.

Short-term effects

Tipping your budget just a bit every once in a while isn’t a disaster. But the spending hangover many parents face after holiday shopping is too large to be easily forgotten.

Over half the parents surveyed will pay for their holiday gifts with credit cards. Just 61% of them plan to pay off their spending within three months, and 16% say they will pay it off over the course of six months or more. That’s half a year spent catching up on holiday spending!

Think carefully this shopping season before you drop another item into your cart. Is this gift really worth trimming your budget for the next three – or six – months?

Long-lasting effects

11% of parents use money from their retirement accounts, 14% have taken funds out of their emergency savings and 11% have taken out a payday loan.

While their kids may be delighted with their loot, parents can be paying for it for longer than they think.

Taking $500 out of a 401(k) at age 35 translates into giving up $6,000 that was earmarked for retirement. Parents are forking out additional taxes and penalties to gain access to the money, and are also losing the opportunity for that money to grow.

Life Lessons

There’s nothing quite as exciting as unwrapping a present. Kids wait all year for the holidays and as their parents, you want to make them happy. This is why 60% of the parents surveyed claimed they try to check off every single item on their child’s wish list.

Aside from the financial drain, purchasing every gift your kids have their hearts set on teaches them a host of lessons they’re better off without. Do you really want your kids thinking they can always have everything they want? Do you want them to feel that everything they own must always be the best and most expensive?

This holiday season, teach your kids that true happiness can’t be bought.

Be proactive

Try saving up for the holiday season throughout the year. While it may be too late for this year, it’s never too early to start thinking about next season. Sign up for our holiday club accounts, and put money aside each month!

Be an informed shopper this holiday season and your decisions will pay off in more ways than one.

Your Turn:  How will you fund your holiday spending? Do you plan to buy your kids everything on their lists? Why or why not?

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