Ho Ho Homeless…? Don’t Let The Holidays Put You in The Poor House

Dec 30, 2012 by

When the Jones’ are filing for chapter 7, you may find it’s too late to be asking yourself if ‘keeping up’ with them was really the wisest of moves…

Living beyond your means has unfortunately become something of an American tradition, its probably the highest expression of the term ‘peer pressure’ to be seen. I recently watched a movie called ‘The Ten‘ which has a scene where two neighbors were so obsessed with appearances and one-upsmanship that it escalated to them each buying their own CAT Scan machines for the house – multiple times, even!

Christmas 2012 just came and went last week and it got me to thinking about how other societal pressures can move us to unwise financial actions.

I submit that the holiday season often represents another case of peer pressure induced financial insanity. People feel pressure to buy gifts for one another, often these gifts are expensive and even when they can’t actually afford them, they are compelled to buy them anyway.

I have lots of friends with really nice stuff. One in particular comes to mind – 6,000 SF home near the lake with 5 bedrooms, big fancy Mercedes and Range Rover trucks, blablabla. You roll up into their house on Christmas and it looks like someone lifted the roof off their home and dumped a Toys R Us truck into the living room. Problem is, these people are what I call ‘functionally broke’. They earn a very good income for the area in which they live, but more or less they are just working to pay their bills every month and have essentially a paycheck to paycheck existence.

I also have lots of friends who don’t make nearly as much money, and in fact several of them have come to me for advice on getting their finances together because they are struggling with their debts. Still I find that when I visit on Christmas, there’s generally a room full of stuff that we both know they really can’t afford.

All I’m saying is, if January rolls around and every year you find yourself needing to pop an Advil before opening your credit card bills, then you’re going about it all wrong my friend.

You’re hustling backwards.

Sinking deeper into debt and then paying additional interest on top of your actual gift costs is just going to lead to you standing on the side of the road with a ‘will work for xmas gifts’┬ásign.

When in doubt, consider this: if you have to use credit cards to buy xmas gifts because you don’t have enough cash, and if you’re going to get hit with interest because you wont be able to pay those credit card balances in full when the bill comes, then you really can’t afford those gifts.

The best advice I can give to people in this situation is to start saving early in the year, put a little something aside every month into an ‘xmas fund’ so that you have some cash set aside for your holiday shopping, then when xmas rolls around make sure to stay within the bounds of your savings and don’t touch the credit cards.

Remember, trying to keep up with the Jones’ is always a sucker move. That aint their fancy car, it belongs to Wells Fargo; that aint their big house, it belongs to Bank of America – because they can’t afford none of their shit either!

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