DebtSafe Blog

The Snowball Effect of ‘Just a Little Bit of Debt Here and There’

Have you perhaps noticed that Christmas is starting earlier this year – referring to all the buying that it is going to involve? All excited about buying stuff on Black Friday, Cyber Monday, AND during the month of December? Not to mention swiping your card after the silly season to be part of a full-on New Year’s party – just because you can. Or, can you really? Well, if you are thinking about taking out a bit of extra credit these next couple of months, be prepared to experience the snowball effect of your so-called ‘just a little bit of debt here and there’ action.

The choices you make now have a massive ripple and snowball effect end January, beginning February 2019. You may think that you are only using a bit of credit for a gift in November, but what about the other gifts you are also thinking of buying in December? And, not to even mention the forgotten responsibilities that you have – the kids needing new school uniforms and stationary or the usual fuel and grocery buys that you also need just to be able to survive the six-month-feel of January 2019.

Stressing a bit now? Before hyperventilating, take a breather and allow the following pointers from DebtSafe to help you to avoid a snowball of debt in the New Year:

  • Apart from festivities and events you still have your usual monthly budget, responsibilities and bills to take care of during these next few months (like your insurance, medical aid and groceries). Keep, therefore, your Christmas Day budget (for example) separate from your overall monthly December budget. Or, your New Year’s Day and holiday budget separate from your January 2019 budget (for example). This will help you to see the overall picture of your ‘different budgets’ and actually help you to know when you have to start cutting out a few unnecessary things.
  • Okay, so you want to buy a few gifts for Christmas – have you saved for it? If you have, when will you buy the gifts? Don’t go buying presents on Black Friday AND Cyber Monday AND the first, second and third week of December. Rather make use of one event and buy what you have budgeted for. If you did not budget properly and use money that you don’t really have, you can almost be certain that you’ll feel the strain later in the New Year.
  • If using credit is how you roll – know that credit is not a bad thing, how you use it makes the difference. Be, therefore, careful to not max out your credit card just in case you have to cover an emergency in January (like your car, a medical emergency or a geyser burst) for example. One thing is for sure – never say never. Emergencies do happen. You should try to always have a Plan B.

Take caution these next three months when considering taking out extra credit. And, ask yourself: “Is it really worth it in the end?” If you are experiencing severe financial strain already and would like to rather consolidate your debt under one affordable payment option now to be debt-free later, contact a registered and trusted debt counsellor for more details.