Christmas + V-day = Broke as a joke.

**I am pretty sure I’m drunk on DQ Blizzards after an epic buy one get one for $0.99 deal I took advantage of last night. I’m gonna post about this tomorrow (don’t worry it is completely related to PF), but today I got a great guest post for ya today from my girl Jenna at Adaptu. I know when guest posts go up you think “Meh, not reading stupid paid post.” I was not compensated for this and it doesn’t suck. I’ve met Jenna in real life and she’s super chill. She asked if she could put something up on PDITF and it was the least I could do after she’s been a loyal reader/commenter for like two years. Don’t be a hater.**

The last remaining Valentine’s chocolate was probably polished off by now and the roses are most likely wilting in their vase. Sounds depressing, but there’s good news: unless St. Paddy’s Day puts you in the giving mood, the “spendy holidays” are over for a few months. So what does this mean for you besides a lack of last-minute trips to the flower shop or candy store? One thing: it’s time to get back on track when it comes to paying off your debt.

So how do we go about this? Like most things in life, it’s easiest to break it up into different steps.

Tally it all up.

Tally up your debt and know where you stand. Just how much damage have you done in the past three months? Were you already in debt prior to the first of the year? Take a good look at your assets and liabilities.  Use Adaptu to aggregate all of your financial accounts and get the real number. It’s never easy to look at that final number, but it’s time to come face to face with reality.

Make a reasonable goal.

How long will it take you to pay off the excess debt from the holidays? Can you have this paid off by June? By next Christmas? It’s important to be realistic with your goal. What can you achieve while still giving enough attention to your other financial milestones (i.e.  retirement savings, building up your emergency fund, etc.)?

Map it out.

You know where you financially want to be. Now it’s time to map it out. What will it take to get there? If you’re cutting back on spending to pay off debt, update your budget so you know what you can still spend. Determine how much you can put towards debt every month without forgetting your other obligations (and making sure you are still enjoying life).

Stick to your plan.  

So now that you’ve mapped out a plan, you know how you’re going to pay off your excess debt. But nothing will happen unless you hold yourself accountable. When you reach a new milestone- say every $1,000 paid off, treat yourself to a small treat − a babysitter so you can enjoy a movie night, a manicure, etc. Something that will motivate you to keep up the good work.

Learn.

This is arguably the most important step.

1. Did you meet your goals? Why did it work this time? Did you make them more realistic than you have in the past? Were you rewarding yourself when you met milestones? If you find yourself in a similar situation – will you know your way out of it? Take note of what made you so successful.

2. Didn’t meet your goals? What went wrong? Unexpected events? Couldn’t stick to your budget?  Take some time to figure out a new reasonable goal based on your experience and start the process over. It’s rare to get it right the first time.

History doesn’t have to repeat itself.

Now that you’ve met your debt relief goals, it’s important to remember this feeling of accomplishment to ensure you’ll never be in debt again. Keep the momentum going for the rest of the year− and don’t let yourself fall into the same trap next winter. You made it through the storm; just keep the smooth sailing going and you’ll be set for the rest of 2012.

**Ninja’s comments: Do the Xmas/V-day expenses throw a wrench in your PF tires? Why do all these points seem so simple, yet are often terribly difficult to actually act on? Why does debt suck so freakin’ bad?!??!**

10 thoughts on “Christmas + V-day = Broke as a joke.

  1. Great guest post!!! You are right the learn step is the hardest it is so much easy to justify than learn!!

  2. This summer I am going to start putting a $100 away into a Christmas gift envelope. That way by the time Christmas rolls around I will have a budget. I went a little over budget this year on my Christmas presents. I really want to get something special for everyone and me! And I did realize how much I spent until January. Yikes! Hoping to avoid that next Christmas.

  3. I always get socked this time of year. I don’t go into debt, but I definitely feel the pain of the extra expenses. It seems silly not to budget for this over the course of the year since we always know that it’s coming, though.

  4. You’re so right that you need to hold yourself accountable with your debt. That’s where it helps to have it all written down. If you are just planning in your head, that little voice will convince you that you can cheat a bit and still waste money.

  5. Stick to the plan!!! That’s the hardest part because it seems like I get a phone call every day from a friend or relative wanting to do some seriously spendy activities. Disneyland! Hawai’i! Dinner at a pop-up restaurant. I’ve been saying no, no, no. But I love them all so much I hope they don’t stop calling me :). I think they’ll survive. So far, I’ve seen my balances go down every month. Not by as much as I’ve wanted. But I think in a few months, having stuck to the plan for this long, the real differences will start to show. Great ideas in this post.

  6. For last year’s 2011 budget, I added up the number of holidays and people I needed to buy for. Birthdays, Christmas, mother’s day, father’s day, anniversaries, and two weddings, and all associated travel. I then divided that by 12 and put it in a rolling budget on Mint to track. So some months it’s almost nothing, and others it’s much higher. What I didn’t account for in those numbers last year were housewarming presents, holiday cards and greeting cards and postage, so I upped that number for this year. I stayed out of debt, but I was more conscious of what I was spending on the people I cared about throughout the year.

  7. Great Article. Sticking to the plan is the biggest key. I recently finished paying $1498.00 per month for 36 months after enrolling in a debt relief program. It was a long 36 months but I did it. Part of the plan was not purchasing unnecessary items. It took a lot of will power not to purchase any new gadgets that came out such as the I-Pad, etc… but once again it was well worth it. Now I can begin to repair my credit score!!!

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