Moving Beyond the Holiday Hangover

Guest Post by Christian Gordun

The holiday hangover is not over yet – most of us still have a stack of holiday shopping bills piled up on our coffee tables or desks to deal with. In a recent post, we addressed one way people can rebound from the holidays and start anew this year, but just like any hangover, the ultimate cure involves more than just one simple trick.

Let’s take a look at some reasons why shoppers often end up with a massive debt headache and arm you with some simple but effective money-saving tips that will help you stick to your budget and avoid the infamous holiday shopping hangover.

The Cause

During the holiday season, shoppers are often rushed to check off all the items on their list and will forgo some of the easiest ways to save money such as checking out competitive prices or using coupons. As they get caught up in the holiday buying frenzy, many are forced to make impulsive purchases while last-minute shopping at stores, instead of researching different options online. The holiday rush causes consumers to forget how much they are spending and rack up massive credit card debt, which has shoppers making New Year’s spending resolutions they know they’ll never keep.

 

The Cure

Instead of making all those impossible resolutions, we’re going to let you all in on a little secret that will leave you debt-free after every holiday shopping season: you never have to pay full price for anything again! As a result of the recession, more retailers than ever are giving you the chance to save money via online coupon codes and deals. It’s simple, just follow these rules:

  1. Go Online: Stop printing and start clicking! If you come across an invalid coupon, it’s easier to find a replacement when you’re shopping online rather than when you’re at a store.
  2. Think Outside the Grocery Cart: Step away from the idea that coupons should only be used to buy groceries. There are coupon codes for almost every item that you can buy online – from magazine subscriptions to electronics and flowers.
  3. Time it Right: The best online deals are offered three times a month: the very beginning, the very middle and the very end. Online stores post fresh coupons the 1st-3rd of the month, the 14-16th, and the 28th through the end of the month.
  4. Avoid Shared Coupons: Avoid using sites that let users post coupons because the likelihood they will be faulty or expired is much higher. Instead use sites which ONLY post coupons that are approved by the retailer.

Coupon Craze is an online coupon code and deal site that will help you follow these coupon commandments. Like we said last time, if you’re hungover, you take aspirin, have a greasy breakfast, get hydrated and sometimes swear that you’ll never do that again! Treat a financial hangover the same way. Create a budget and then stick to it by using online coupons.

Are you ready to make online coupons a part of your shopping routine? Let us know!

 

About the Author

Christian Gordun is the founder and CEO of Coupon Craze, a free consumer resource with online coupon codes and deals from over 10,000 retailers. He founded the company in 2000 as a hobby, and prior to taking it on fulltime, spent five years as a senior programmer and technical project manager. He received his master’s degree from London Business School in 2008.

Cure for a Credit Hangover

Guest Post by Paula Drum

Often, the cheer of the holiday season can be all consuming and shoppers forget that unlike Santa, their budgets are real. The exhilarating high of making a memorable December is quickly forgotten when the next year’s financial hangover settles into our banking accounts.

So what can you do to rebound from the holidays and start anew this year?

This post will provide suggestions to those relying on credit to create a budgeting plan. We’ll begin by taking a look at one potential cause for a financial hangover, and then discuss how to start a credit budgeting plan to alleviate and prevent future financial hangovers.

 

The Cause

One catalyst for a financial hangover takes the form of credit purchases. Evaluating the total price paid for credit purchases is an area that people often neglect when using plastic. If you don’t pay off your credit card bills in full every month, then you are financing your purchases and need to add in the interest costs to your budget. Budgeting credit purchases based solely on the price paid during checkout can put you in a difficult financial position.

 

The Cure

If you are a person that relies on credit, you should plan a 2010 credit budget. To create a successful plan, it is imperative that you take the time to research total purchase cost, which includes the retail price plus interest accrued over time. To avoid creating “perma-debt” this credit budget must outline both the total cost of your purchases and how long it will take you to pay off the debt. Before you decide to make a credit purchase, follow these steps:

  1. Tally the retail price of your purchases – “The retail cost of this purchase is $219.99”
  2. Target a date to pay off your debt = “Based on my budget, I can pay this off in four months”
  3. Estimate your total cost plus interest

 

Of course your total credit card payment will depend on your particular card and the balance you currently have on your card.  But you can estimate your real purchase price with interest to make an informed decision.  Try a loan calculator at a site like Bankrate.com.  After all a credit card line is a form of a loan.  Note that many calculators list the length of time in years. If you plan on paying off the loan in less than 12 months you’ll need to convert it to a fraction of a year (4 months divided by 12 months =.33)

Using the Bankrate.com loan calculator, the total cost to pay for this purchase over four months with a 14.9% interest rate is $226.81 broken into four monthly payments of $57.27.

Making good spending decisions depends on having the right information. By creating a credit budgeting plan, you’ll have complete transparency regarding the total cost of using credit and know exactly when you’ll have a zero balance.

Unfortunately, being able to calculate your total cost plus interest may not always be convenient when shopping. One avenue where you may find a better deal is by researching retailers with alternative payment plans, such as Gettington.com, that provide a choice of payment plans along with a clear breakdown of a total purchase cost and interest paid before you make a purchase.  Transparency in understanding your total cost before you make your purchase enables you to make better budget decisions.

Remember: if you’re hungover, you take aspirin, have a greasy breakfast, get hydrated and sometimes swear that you’ll never do that again! Treat a financial hangover the same way. By creating a credit budget and researching the Web, you’ll be on the road to recovery and well-equipped to avoid future credit headaches.

How do you plan to budget credit purchases in 2010?

 

About the Author

Paula Drum is General Manager of Gettington.com, an e-commerce retailer that provides three payment options to help customers budget purchases that fit their individual financial needs.