About one-third of U.S. residents took on debt for the 2020 holidays, according to a study from the Magnify Money personal finance site.
Breaking it down further, there’s good, bad and worse news about these findings.
The good news: Fewer people (31 percent) borrowed this year than last year (44 percent).
The bad news: Those who did took on more debt ($1,381) than in the previous year ($1,325).
The worse news: Half of those furloughed or laid off due to the pandemic took on holiday debt.
It gets better (i.e., it gets worse):
- 18 percent used a payday loan or title loan to finance their shopping.
- 22 percent used store credit cards, which have very high interest rates.
- 89 percent said they wouldn’t be able to pay off their holiday spending debt within one month – and 18 percent said they plan to make only minimum payments.
Could be that some of the gifts were things the recipients needed anyway, such as new boots or a winter coat. Heaven knows I got my share of clothing each Christmas. If I were a betting woman, though, I’d say that lots of that spending was of the “dammit this year has sucked and my loved ones will have a good holiday!” variety.
About that last: I should know, having indulged in this myself this Christmas. The big difference? I didn’t go into debt because I had the money in hand, and spending it didn’t imperil my overall finances. Carrying a card balance – let alone taking out a payday or title loan – is not the way to celebrate.
To help pull people out of the post-holiday money blues, Kathy Kristof of the SideHusl website suggests “5 side hustles to relieve a debt hangover.” It can be tough to get a side gig and it’s a nervous time to be leaving the home. That’s why Kristof chose gigs that are “in high demand and present relatively little risk.”
If you’re able to take on one of these jobs, consider keeping it up for a bit after your debt is repaid. “Extra” money can beef up your emergency fund, or maybe serve as seed money to start your fund in the first place.
Kristof’s site reveals the pros and cons of side hustles, rather than promoting them all as “anyone can do this and you’ll get rich quick!” (which is too often what’s seen online). She’s a longtime personal finance journalist who wants to help people out. Check out her site, and share it with folks who could use it.
And speaking of side hustles….
Pay less, earn more
The folks at the Freelance Writer Academy have announced a 30 percent discount for their courses and course bundles during the month of January.
Myself, I fell into freelancing after an 18-year newspaper career (during which I unknowingly made connections that landed me at MSN Money starting in 2007). Relatively few people will have that combination of training and lucky breaks. Instead, they take courses to learn how to write and how to make their own luck.
I feel confident recommending the Freelance Writer Academy because I know the three people who created it. They are skilled writers and knowledgeable about the way to get going in the freelance writing industry.
Among the many things you’ll learn:
- Finding decently paid writing jobs
- Learning to work with editors
- Creating a portfolio
- How to mix freelancing with a day job and/or how to segue from day job to full-time freelancing
- Smart business practices
- Dealing with taxes
- How to “expand your empire”
Drop by the course website and use the code NEW21 at checkout. Miranda Marquit, Ben Luthi and Kat Tretina have much to teach you.
Go win these gift cards
The Wealthy Nickel has a $100 Amazon gift card up for grabs. The entry deadline is Jan. 24.
Parent Portfolio is also giving away a $100 Amazon gift card. You have until Jan. 29 to enter.
Fresh Giveaways is awarding a $25 Amazon gift card to a random winner (lots of ways to enter). The giveaway ends Jan. 17.
Invested Wallet bucks the trend: It’s giving away a $100 Visa gift card. The deadline is Jan. 25.
Savings.com has a short-term giveaway for Shein gift cards. Shein specializes in “trendy but affordable” women’s clothing. Ten winners will each get a $50 e-gift card. Enter by 11:59 p.m. PDT Wednesday, Jan. 13.
Savings.com is also giving away five $100 e-gift cards for the Sam’s Club warehouse store. What would you buy with a $100 head start? Sacks of rice and beans, tons of TP, diapers for the family shelter? The entry deadline is 11:59 p.m. PDT Saturday, Jan. 16.
Note: If you win anything, please come back and brag about it.
Some much-needed humor
One of my University of Washington classmates, Margaret Gordon, is a professional singer and teacher. Recently she wrote and performed a parody of the Disney song, “Part of Your World.” This one is about COVID, and it’s beautifully written and sung.
Please share this link. We could all use a good chuckle right about now.
Incidentally, Gordon offers singing tips on her YouTube channel. If you’re interested in vocal performance or know someone who is, I hope you’ll subscribe.
Great video; What a voice!
Agreed! I hope you will share it with those who might appreciate it.
No debt hangover for me this year as we pretty much let Christmas come and go without fanfare. Our adult kids agreed with us that there would be no exchanging of presents because we wouldn’t be seeing each other anyway. I did give some cash to our four grandkids who are all teens and really appreciated it. I’m embarrassed to say I did have quite the debt hangover the last two years before that. I vowed never again and began a savings account solely for Christmas and birthdays. It works. In the years before we retired as mail carriers we used our Christmas tips for holiday expenses. That worked too but as we are both retired now we had to come up with a different strategy, thus the savings account. I can’t believe it took me two years though, to figure this out. Live and learn, I guess.
My mom used to have a Christmas Club through the local bank. Nowadays we can make our own, through automatic savings. Whatever works!
I didn’t go into debt for Christmas. I have debt from other things but Christmas I don’t believe so. I tracked my expenses and whatever money i have is whatever money I have to buy gifts. Literally that’s it. Last Christmas 2019 was very different financially wise compared to 2020. I had gotten a bonus in December 2019 and spent a lot of it on gifts. This year I was open and honest about my finances with my family and most family members agreed not to spend too much money. I said forego secret santa gifts and raffle prizes (that we normally do) and stick to gifts for kids and family gifts.
( though some people did it anyway grrr…. ) There was no pressure to just spend money you don’t have. Most of it was us being able to safely spend time with each other and enjoy each others company which I had to remind my kids about that. Though I have to say by New Year’s Eve I was thankful that 2020 and Christmas was over with!!