How much debt is too much to buy a house? Here, we discuss buying a home with existing debt, and whether it’s the right move for you.
The holidays are here! Just like last year, everyone deserves to celebrate a little extra for making it through 2021. If you’re excited about the holiday season, odds are you’ve already started your shopping, and likely have some decorations up too. As fun as this season can be, that enjoyment can come to an abrupt end when the bills start to roll in. While it’s hard not to overspend during the holiday season, you likely don’t want to start your new year in piles of debt. If you need some help having a debt-free holiday season, that’s where we come in. Here are some tips to help keep your debts low and your spirits high!
Put a price limit on gifts
We all want to give our friends and family the best gifts in the world, but when it comes to presents, the best things in life are not free. If you’re trying to enjoy a debt-free holiday season, you can suggest putting a price limit on the gifts you exchange with others. This has the benefit of giving everyone a clear picture of how much to spend, while ensuring you don’t spend beyond your means. The best part of this plan is avoiding the misery you might otherwise experience come January when your bills arrive. Besides, as fun as the gifts are, that’s not what the holidays are about anyway!
You can go even further to save money on gifts by trying a do-it-yourself project! DIY gifts are often less expensive, even if they do take some more time and work. You could take on one of these projects to contribute to a person’s gift, instead of buying even more items. No matter how inexperienced of a crafter you are, you can find a DIY idea that will suit you. Plus, this level of effort shows a person just how much you care!
Do a Secret Santa exchange
Suggest doing a Secret Santa gift exchange with the people you usually buy for. This could be within your immediate family, or with your friend group (or both!). Instead of buying gifts for everyone, you’ll be responsible for selecting one great gift for one person, which will significantly reduce your spending. Plus, you’ll be able to focus on that one person and make sure their gift is personalized and perfect for them. Set a budget with your group ahead of time so you’re all on the same page spending-wise.
Avoid new credit
Every store has their own credit card these days, and you’ll see no shortage of chances to sign up for one on top of your existing credit card. As tempting as it might be, don’t commit to new credit. What’s the harm, you might ask? Every time you apply for increased credit or new credit, it could have a poor impact on your credit score. Plus, having more credit makes you more likely to spend! The more you spend, the more you owe, and the more likely you are to run into debt. You’ll have to make minimum payments at the very least, which will make a dent in your savings.
Pay bills on time
You should always try to pay your bills on time, but this is extra important around the holidays! Odds are, you put more on your credit card than you normally would, meaning you could have a fairly big balance to pay off come January. Between Christmas gifts, decorations, and dinners, costs add up quickly. Plus, depending on the interest rates of your purchases, you could end up owing an excessive amount if you miss a payment. Make it a priority to pay your holiday bills once they roll in. If you need to set reminders for yourself, or even automatic payments, you can do that too. The longer you leave your payments, the more interest you’ll owe, which can quickly become overwhelming if not handled correctly.
Looking to buy a property?
If homeownership is one of your goals heading into 2022, it’s extra important to have a debt-free holiday season. You want to get your home buying journey off to the right start, and that means limiting your existing debt so you can secure a mortgage. Plus, you should get in touch with a broker. Brokers help you understand your budget, current financial situation, and what you need to do moving forward. For the most successful first meeting with mortgage professionals, do your best to keep your credit score high and your debts low as we round off 2021.
If you have questions about your mortgage or buying a home, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.