A customer asked us recently, “I know I should have started a holiday club account, but here I am so close to the holidays without enough cash. Should I just use credit cards or go with the credit union’s holiday loan?”
The notion of literally charging your way through the holidays is tempting. But before you give in and wear out your plastic or take on another loan, remember that convenience often comes with a price. If you don’t have worries about paying your new-found credit card bills come January or paying extra throughout all of next year while friends and family enjoy the gifts you purchased for them, then go for it. But a more practical approach would be to begin with assessing your situation, cutting unnecessary expenses and then crafting a plan to move forward in a more debt-free manner.
You may want to check into your credit card options with Midland Credit Union. We offer simple rewards and two different cards. There are no annual fees and no gimmicks you have to watch out for, with free balance transfers for those credit cards that are higher balances.
Make a list of all your expenses, from food, to fuel for travel, to gifts. Do you need to buy for everyone on your list? Will a card be just as welcomed and appreciated in place of the annual fruit basket? A 10-pound turkey instead of a 15-pound one that sees leftovers get thrown out? Trim out any expense you can find. Then prepare a budget you can live with, and stick to it. You might find that you very well don’t have enough cash flow to cover every expense, but you are probably a lot closer than you were when you started.
Once you are in this position, charging might be a good option — but try not to let that debt linger longer than a month or two. That way you’re not paying as much in interest. At the same time, begin a holiday club account, and start contributing to it regularly. You might also want to take the money you were paying on the credit card or loan, and use that to begin systematically saving throughout the year once the card is paid off. Contact Midland Credit Union today to get that holiday account started. It is never too late to begin saving for the future. While you are at it, this is the time to request and schedule your free financial checkup.
Information provided by Brenda Reicherts, branch manager, 1225 Copper Creek Drive, Suite M, Pleasant Hill, 515-278-5333.