This year has been a tough one for all of us. As many of us had to pivot in our business and personal lives, or even lost our job, we are holding on tightly to any small glimmer of hope or excitement. As the holiday season rolls around, you may be thinking about what you can do to make these next few months special for yourself and your loved ones. However, excessive spending throughout the holiday season can lead to financial strain in the new year. Here, the Maryland bankruptcy attorneys at Grossbart, Portney & Rosenberg, P.A. discuss how you can enjoy the holidays while still prioritizing your financial obligations, helping you start the new year off on the right foot and avoid potential bankruptcy.
Do Not Hold Out Hope for Potential End of Year Bonuses
The holiday season is often known as the “season of giving”, and while this is still true, it does not apply to every business. With the impact of the coronavirus pandemic spreading across the nation and the world, businesses of all sizes are being hit, leading them to pivot their strategy and reevaluate their financial capabilities the upcoming year. Spending prematurely as you scroll online through Black Friday and Cyber Monday deals may seem smart at the time, but could harm you in the near future. A rule of thumb that so many individuals often overlook is spending money that they don’t have directly. Credit cards and payment installment applications have made it easier and easier to justify large purchases, but it is your job to prepare for every scenario. With many states, including Maryland, reducing capacity and potentially preparing for another lockdown, bonuses are not guaranteed. If you spend excessively beforehand in hopes that your bonus comes through, and are unable to pay the money back, you will be stuck in a financial rut, setting you far behind financially as you enter the new year.
Do Not Include Tax Refund Money in Your Spending Decisions
For larger purchases you are thinking about, you may be entering a payment plan through your credit card company or directly through the store or service provider you’re buying from. When it comes to these purchases, having monthly payments can be deceiving, as you view this purchase as doable payments over an extended period of time. However, 2020 has been a crazy year for all of us to say the least, and sadly, we are not fully prepared for what 2021 has in store. While we hope that things will return to normal and we will be able to re-adjust to our daily lives, there is no guarantee that this new year will not bring the same, or even new, sets of challenges. After your end of year bonus, many individuals will bank on their tax refund through winter and spring purchases. With everything that occurred during this past year, 2021’s tax season is likely to be excessively complicated, leading to the potential of you getting a delayed refund or potentially having to re-file. If you place your trust in this refund for spending purposes, you may suffer the consequences of being unable to complete your payment plan, leading to additional fees, interest rates and ultimately, bankruptcy.
Do Not Fall Under Societal Pressure to Spend During the Holidays
We all know that sometimes, your spending patterns change as a reflection of your environment. The holiday season is always one in which many families and friends struggle with gift giving and financial stability. Pressure from loved ones, social media and more all play an integral role in your financial mindset entering this holiday season, so it is your job to take a step back every now and then and evaluate your current financial choices. If you are feeling additional pressure to spend this holiday season because of the difficulty that this year has brought, consider speaking with close friends or even a financial advisor to ensure that you do not fall into a dangerous spending pattern. This past holiday season, 24% of consumers said it would take them at least 4-5 months to pay off their holiday debt, generally only making minimum payments. If you are looking to make 2021 a year of change and success, overspending during the holiday season can quickly put a halt on your financial goals.
Seek Help With Maryland Bankruptcy Attorneys at Grossbart, Portney & Rosenberg, P.A.
If you have suffered financially this past year in your personal life or your business, and feel that you are unable to overcome these obstacles alone, consider seeking the help of experienced bankruptcy attorneys, such as those at Grossbart, Portney & Rosenberg, P.A.. We know how difficult this year has been for so many, and that is why we make it our mission to help Maryland residents create an actionable strategy and guide them through the bankruptcy process, so they feel adequately prepared and protected as they work to achieve financial freedom. To see how our qualified team of bankruptcy attorneys can help you through this difficult time, contact our office today by clicking here.