There's something about shopping during the holidays as I watch consumers being attacked by exuberant cashiers pushing their store's credit card that gets me concerned for those trying to build a solid life after bankruptcy.
These clerks seem to be unaware of how careful individuals have been all year to build their life after bankruptcy; by watching what they spend, and how easy it is to go over budget. Offering a “credit rebuilder” a new card is like offering a recovering chocoholic a gooey double-fudge brownie supreme.
The holidays bring about mixed feelings among my clients: joy, anxiety, fear, sadness….not any of it relating to the reason for the season.
Rebuilding your credit and creating the life after bankruptcy that you desire is a difficult tightrope balance between moving forward with your life and not ruining the upward progress of your credit score.
Holidays mean gift-giving gatherings with sometimes hundreds of people, if you total them all up. Pressure rises when the office party committee asks us to pitch in for gifts for management.
Your head starts spinning when you think about how your extended family has grown and how they will all exchange presents Christmas Eve at your house this year. You finally feel the wind knocked out of your sails when the cashier tells you that you can save up to 25% on your purchase if you apply for their wonderful store credit card.
Just remember and keep this thought at the front of your mind...creating the desirable life after bankruptcy is the objective, not the savings of 25% that is surely to be out of our original budget anyway.
As someone who has recently discharged a bankruptcy and is trying to rebuild life after bankruptcy as well as create a high credit rating, should you respond to such a sweet, seductive offer? (Twenty-five percent off purchases, after all, would give you the extra money to buy Aunt Millie that deluxe food steamer!)
But here's what I teach as a financial counselor from Credit Is Key: though it is much easier said than done, do NOT apply for any credit cards during the holiday crunch.
Every financial move should be the result of planning and preparation for your life after bankruptcy - not suddenly caving in to pacify the salesclerk - or Aunt Millie. If you say “yes,” then the store will make an inquiry on your credit.
Did you know that even a couple inquiries will actually hurt your credit?
Rebuilding your life after bankruptcy requires inner strength. A strength you have been nurturing and growing since your discharge. A strength that is given a boost by having a specific goal in mind and a planned strategy in place; building a wonderful credit rating to enjoy your life after bankruptcy.
Help yourself! Instead of falling into the “get-a-credit-card-and-reduce-your-spending” trap, try these ideas for holiday savings --- without inquiries or damaging rejections. Always remember the objective...improve your life after bankruptcy by improving your credit rating!
• Let's get back to sweet Aunt Millie. Do you really think she cares what gift you give her? Your friends and family care more about you, your life after bankruptcy and your financial future than any gift you could bring. Aunt Millie would be delighted with any small token of affection and would much rather have a visit from you than to have you depressed or bankrupt again.
• Christmas cards are expensive, consider sending e-mail greetings or holiday cards.
• Many people would rather have an old-fashioned, hand-made gift than an expensive gadget. Consider these hand-crafted, thoughtful options:
- Frame your favorite photograph of you and the recipient; group several snapshots in an inexpensive frame. Your life after bankruptcy is much more important and this gift lasts forever.
- Instead of buying each other gifts, go out to lunch or dinner together.
- An alternative to giving every member of your family something is to suggest doing a “Secret Santa” gift. Each person buys just for one other person, instead of a whole family. Remember, creating your ideal life after bankruptcy does not have to be an "ordeal", the Secret Santa method is fun.
- Celebrate the winter holidays with a holiday “spending freeze.” Set a limit, remain committed to your life after bankruptcy and don't go over it. Agree to keep your spending at this level for the next several years. Part of the joy is in which friend or family member can be the most creative or find the most interesting gift for under $10.00. (Talk about friendly competition! You'll probably laugh a lot more than if everyone had given fancy, store-bought gifts!) You see, creating your ideal life after bankruptcy does not have to be boring.
- If you can cook, present a coupon for a delivered dinner or casserole on a certain night. Send cookies in February or a cake on a birthday. (Sometimes people need and appreciate these things more at other times of the year than they do at Christmas.)
- If you're creative, call a day with your family to make presents; handmade stationery or notecards, hot chocolate or spiced tea mix, painted t-shirts, or slippers embellished with buttons, ribbons, or initials, embroidered dishtowels, or create a scrapbook of family stories and quotations. Many clients gain huge perspective during their life after bankruptcy regarding the true meaning of holidays.
- Instead of buying a lot of unnecessary items, buy each person one nice gift. (You'll be surprised how those tiny little “filler” presents add to the budget!)
- A family favorite, even if you aren't trying to stay within a budget, is to create a “Gift Coupon Book”, regardless of your life after bankruptcy commitment. In it you can entitle bearer to free breakfast in bed, a leisurely Saturday without kids, and even 'wildcard' coupons that let the bearer fill in the gift.
Make sure you know your receiver well if you intend to include the last category!
The offer to get a credit card may be appealing, but in the long-run, enjoying the holidays, your family, (especially that sweet Aunt Millie!) your friends, and knowing you stuck to your plan of rebuilding your life after bankruptcy, control over your finances, is much more rewarding than a smile on that cashier's face.
For those needing their own strategy to rebuild credit and their life after bankruptcy, join the Credit Is Key membership website. Members enjoy access to many life after bankruptcy rebuilding resources, including a FREE e-course on strategies to quickly and effectively rebuild your damaged credit.
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