Fort Lauderdale, FL (PRWEB) September 24, 2015
It may not seem like the holidays are close, but there are less than 100 days left in the holiday shopping season. Statistically, this is the most expensive time of year and there can be potential risks for taking on debt and encountering financial challenges caused by overspending.
CardHub's Quarterly Report (http://www.cardhub.com/edu/credit-card-debt) shows consumers added $32.1 billion in credit card debt from April to June in 2015. As a result, by the end of the year American families are expected to be stuck with average credit card balances of $7,813.
"That amount of debt is simply not sustainable for most people,” says Gary Herman, President of Consolidated Credit. “What’s worse, if that debt is paid back using only minimum payments, the consumer would have interest charges over $5,700 before the debt is paid off.”
With that in mind, Consolidated Credit encourages people to take time ahead of winter holidays to assess their finances so adjustments can be made ahead of time.
“Advance planning can go a long way to helping you avoid debt problems that people often face at the holidays,” Herman affirms, “and if you see you’re facing challenges already, being proactive could save you a significant amount of financial stress in the New Year.”
Consolidated Credit's Fall Financial Checklist:
Credit reports. Each credit user in the household should review their credit report yearly to ensure it is accurate. The Fair Credit Reporting Act allows consumers to obtain a copy of their reports for review once every twelve months through annualcreditreport.com.
Complete a budget review. Evaluate current spending to make sure it’s on track with set budget targets. If you don’t have a formal budget, make one. It’s still the best and easiest way to avoid overspending.
Identify saving goals. Discuss plans for next year as a family so you can start saving strategically. Whether the goal is to buy a new car or take a family cruise saving in advance helps minimize debt and makes the debt that is taken on easier to pay off.
Pay off debts. Credit card debt should be minimized before holiday shopping begins. Solutions like debt consolidation may help lower payments and make it easier to eliminate debt quickly.
Start taxes early. Start gathering documentation and receipts now. You can also research deductions so you know what you’re eligible to claim. For example, you can deduct medical and dental expenses if they exceed ten percent of your adjusted gross income (AGI).
Protect assets. Review insurance plans to see if policies have changed. This includes homeowners and renter’s policies, as well as car insurance. Also take time to check warranties associated with expensive electronics and other items to determine if it’s worth it to extend the warranties or buy new if they break.
Review retirement plans. One of the best tax-reducing strategies is to contribute to retirement plans. The 2015 tax deduction for IRA accounts is $5,500 or $6,500 if you’re over age 50. The deferral limit for employer-based 401(k) plans is $18,000 or $12,500 for SIMPLE 401(k) plans.
About: Consolidated Credit is one of the nation’s largest credit counseling agencies. In over 20 years, they have helped over 5 million people overcome challenges with debt and other financial issues. Their mission is to assist families throughout the United States to end financial crises and solve money management issues through education and professional counseling. Visit ConsolidatedCredit.org for more information.