ORLANDO, Fla. – It happens. Without proper planning, year-end holidays such as Christmas and New Year’s can sneak up on you and leave a dent in your credit score that can take months just to buff out and even longer to shine.
This week on “Black Men Sundays,” host Corie Murray interviews Reggie Tolbert — a wealth management adviser with RF Tolbert Wealth Management, a financial services company of his namesake — to learn what should be done throughout the year in order to spend big for the holidays, all while mitigating that collateral damage.
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“One of the things when you’re starting over — a New Year’s resolution — it’s almost like you’re starting at Ground Zero all over again. A lot of us go to the gym early in the year, we start at Ground Zero, we come up with a plan. Well, your financial Ground Zero is exactly the same way. You need to come up with a budget and a plan to start the year off,” Tolbert said.
With a budget established, Tolbert suggests should then determine what items in that budget are your priorities, especially if you’ve learned the hard way to avoid post-Christmas debt entirely.
“You may want to readjust your annual budget to compensate for more money to pay that debt off from Christmas, get that pay down, get your credit score back in line those first 90 days, and then just continue to be disciplined throughout the year,” Tolbert said. “One of the ways that you can avoid having those big Christmas bills is there’s things called Christmas Clubs. You can start up a Christmas Club account early in the year, set aside some money from your normal spending and then have a lump sum of cash (in) October, November, where you can use that money for Christmas shopping.”
As Tolbert told Murray, the name of the game here is discipline, a common virtue when wealth management is the topic of conversation on “Black Men Sundays.”
For many, discipline starts with some sort of system. Where credit card payments are concerned, Tolbert suggested to either pay them off in steps or to get it done all at once to avoid the pinch of interest and monthly minimums.
“There’s one of two ways you can do that. You can take it down systematically, month by month, you can allocate more monies to paying that down and hopefully get it down in three to six months, or you can just bite the bullet at the beginning of the year and say, ‘Hey, I’m gonna take a lump sum of money from a savings account, some money I have set aside,’ knock it out, pay that down, and then allocate heavier on the savings, because if you’ve got a credit card, you probably paying anywhere between 13%-29% interest on that card, so you want to pay that down as quickly as you can,” Tolbert said.
Black Men Sundays talks about building generational wealth. Check out every episode in the media player below.