Christmas, Gifts, and Debt
Five months to go for Christmas but till now last year debts are yet to be paid. Then, jobs are few, industries are having tough time, stocks are not doing well either, and no forecast is in my favor. So where is the break that I deserve? Yes, government is helping firms so they can start making those junk cars and start lending huge amounts to people like me who can never pay back. I like that. But, wait, we started talking about what kind of debt I should incur for Christmas. What’s the plan?
What’s the debt level like? According to a data from Godfather Economic Report America’s total debt till starting of 2009 is $57 trillion which is termed as Total America Debt which includes debt of federal, state and local government, households, business, federal debt to trust fund, domestic financial sectors. US personal debt is rising. Debt percentage is going up against the US national income. It has been found that during March 2006 US debt was $2 trillion and which increased to $10 trillion in September 2008.
Let us look at some numbers at personal or family levels which make more sense to us than what White House has been doing for the nation. Following comes from federalreserve.gov/pubs/bulletin/2009/pdf/scf09.pdf
It is clear from above that 85% of total family debt is home (and related) loan while 10.2% is auto or student type loans – these do not change with Christmas type of spending patterns along with 0.4% not secured by residential property . So let us ignore these for our discussion. That leaves 3.5%+1.1% = 4.6% which is on credit cards and other loan instruments. These will most probably get impacted by Christmas spending. On average, one American family spends $750 on Christmas gifts. Now what does that tell us? We have full control over this amount – and this 4.6% number. Other numbers are pretty much decided for us – we have to be making same payments on those without choice. What we can do is this:
- Cut down on total amount from $750 to something lower. This would help all.
- Then, we can, as a gift, make a payment towards other loans for our friends and relatives instead of buying trinkets. Let us call anything but loan payment as trinkets. That would mean we will incur the debt as we would anyways but someone would pay off a loan bill for us as we would pay-off someone else’s.
- This would help stop the increase in total debt for us. What a relief!
Christmas is a time of festivities. We celebrate spirits and share joys. This time it is going to be wise if celebrated little differently. Let us assume we are all in trouble and we have a method to help out each other in a fairly creative way. Let us pay each others’ loan as a gift – wow!
Plan your Christmas and enjoy a less-in-debt Holiday Season this year.
Article Source:http://www.articlesbase.com/debt-consolidation-articles/christmas-gifts-and-debt-1054946.html
Leave a Reply