Christmas Credit.. 4 tips to help you get rid of it!

As the holiday season is in full swing, many of us have found ourselves caught up in the hustle and bustle of Christmas shopping (for ourselves and loved ones). Although the process of shopping itself isn’t a bad thing, it does have the potential to be not so great if you are shopping excessively on credit. Credit card debt is one of the number one aspects of our finances that keep black women from becoming home and business owners. At times it can seem that our debt is a hopeless case and that there is nothing that can be done to correct it. This is simply not the case. Speaking from experience, I can assure you that there is always a way out of debt. Check out these tips below!

1. Find out where you stand. This is often the hardest step, but you must calculate the present damage in order to make a plan to get you out of the financial hole you are currently in. Spend some time alone with that mountain of unopened bills that have piled up over the past few months and start sorting. How much do you owe on credit cards? When’s the last time you’ve paid above the minimum amount due on your bill? When’s the last time you’ve paid at all. Get out a blank notebook and begin to keep track of your financial habits and chart out a snapshot of what your total debt looks like.

2. Create a realistic action plan. Now that you know where you stand, it is time to figure out how you will get yourself in a more stable position. Recognize that although it may have taken a few shopping sprees over the course of a month to get yourself buried under the cloud of debt, it will take much longer than that to get yourself out of it. Whether you can only afford to save $20 or $200 a month to put towards your debt, do what you can to get the ball rolling. There are a number of financial planners and consultants out there who can assist you and tailor a plan to fit your goals and resources. Additionally, there are a wide variety of books and information available on the internet dedicated to this very subject.

3. Be honest- with yourself and with others. So, you know where you stand and you even know what you will do to make things better. What now? You must begin to get real with yourself and with those around you. First off, no more trying to live above your means and no more trying to keep up with the Joneses. No, you don’t have to go around telling everyone you meet that you are $20,000 in debt, but you shouldn’t be dishonest either. Get real with your bill collectors also. Let them know that you have fallen on hard times and own up to the fact that you have gotten behind in your bills. Discuss with them your new action plan and don’t get off the phone until you come to an agreement about how you will pay them back. You will find that the more honest you are with them, the more likely people (including your debt collectors) may be willing to help you.

4. Keep your word. Now that you’ve gotten real with yourself and others, it’s time to stay real. Be sure to follow through on any commitments you’ve made for repayment. If you foresee issues in the future, be proactive and reach out to your creditors. Find out ways in which you can work out an extension if need be. The bottom line is that you must begin to show responsibility and accountability for your debt. It is only when this is done that you will assure that you do not make the same mistakes again.

The most important thing to keep in mind is that being in debt or out of debt does not define you as a person. There are wonderful people with a credit score of 480 and miserable individuals with a score of 720. Your debt situation is one aspect of your life, it is not your entire life and like every other negative situation you are presented with, it can be overcome.