PINE BELT (WDAM) - As we close out the year, the stress of the holidays slowly creeps behind us. But for many Americans, the stress of holiday spending lingers.
Studies show that consumers racked up an average of over $1,000 in debt during the 2017 holiday season. The survey showed that the payoff rate would take months, even leading up into the next holiday season.
“It’s a really big let down for a lot of people because they really go in debt in order to make this a good season,” said shopper Sheree Calhoun. “I don’t do that.”
A 2017 survey by Magnify Money shows that, on average, Americans went in to almost $1,054 in debt during the holiday season.
Shopper Lauryn Bohn said she understands the struggles of having a successful holiday season while trying not to break the bank.
“Other than it being the joyful season, sometimes it has its stresses because you’re trying to find a gift for everybody and you’re trying to make sure your paycheck will cover everybody,” said Bohn.
Sixty-eight percent of shoppers said credit cards were the main culprit for their debt, while 17 percent blamed store cards and 9 percent blamed personal loans, according to Magnifymoney.com.
Survey sites such as the National Retail Federation predict consumers spent 4.1 percent more this year than last. This leads to the possibility of a debt increase.
Some shoppers said they refuse to go in debt over the holidays.
“Oh no ma’am, no ma’am,” said Courtney Perryman. “It’s a lot of other bills coming after the holidays and the bills keep coming when the holidays come.”
So, how can you still have a successful, stress-free holiday without breaking the bank? Founder and CEO of Financial Literacy Institute Angela Howze said it all comes down to discipline when it comes to keeping your money from going up in smoke.
“The key is to be focused, know your budget and only spend the amount that you were stated you were going to spend,” said Howze.
She said when it comes to budgeting, you need to first take a financial selfie by placing all your spending and bills on the table and determine where your money is really going each month.
“Once you’ve paid all of your responsibilities for that month, what money do you have left?” Howze said. “That’s the money that you’re going to start putting away or you’re going to pay on some of the creditors that you have.”
A Nerdwallet analysis said that nearly 73 percent of shoppers used a credit card this holiday season compared to the 58 percent last year. On average, consumers charged over $650 to their cards.
Some consumers claimed it took them less than three months to pay off those balances, but some shoppers, about 39.4 million people, are still paying off last year’s debt.
Howze said if you’ve maxed out your credit cards, there’s one of two things you can do.
“If you have a higher credit card limit and you have five or six smaller credit cards, take the higher credit card limit and pay off all the small ones,” said Howze. “That way you’ll only have one big payment that you’re paying on a regular credit card as opposed to paying on those smaller credit cards with the higher interest rate.”
She said you can also take your smaller credits and make the minimum payment on each one, doubling up on the card with the smallest amount.
“And once you double up on that payment, continue to make monthly payments on your regular minimum payment on the rest of the cards,” Howze said. “Once you knock off that payment, take the money you were making on this one and go to the next card."
Howze said it ultimately it comes down to recognizing your needs versus your wants, and with focus and dedication, it can take up to seven days for someone to fully understand your financial selfie.
But for those of you looking to indulge one last time in those post-Holiday sales, Howze has one warning.
“Remember, a need versus a want and you have to and you will come out of debt,” she said.