- 8 min read
Brad Stroh gives tips to consumers on how to make smart financial decisions around the holidays.
Tips and ideas from Bills.com Founder Brad Stroh in an interview with Fox News.
Fox: Alright we got to go out to San Francisco now, speaking of paying your bills and well people are not. Brad Stroh is here with us he is the Co-CEO of Bills.com people are struggling these days I mean, this is a genius idea, but you got some good ideas too I know they're a little more conventional but they still work.
Brad: Well, what we are trying to lead off with is help the economy help the American struggling, especially heading into the holiday season is make sure people have a solid financial game plan so you don't end up overspending in the holidays and end up with a debt hangover come January when the credit card bills show up.
Fox: Cause that happens, it happens to the best of us. You know, I have my own little personal Christmas club where every week I have money taken out my check and put into an account that I don't touch, because Christmas as much as you plan or any holiday any of the holidays at the end of the year they smack you they come out of nowhere and people get all giddy they want to give.
Brad: Well there’s no question and so you're in the minority and I applaud you for that and that is one of our tips, start saving set money aside. What you don't want is to be guilted into having a sense of showing your love and affection for your friends and family by the amount of money you spend on them. So what we really want is you control take control of the holiday spending. Set a limit is our first tip. Come up with the amount you can actually spend and fix it to that, do not go over that amount.
Fox: And let me tell you that is brilliant, but it is so difficult. It is so, so difficult.
Brad: It is hard, but if you are disciplined and you have a game plan you can do it. The average American spends up to $700 hundred bucks on holiday spending on up to eighteen presents. What you need to do is figure out how much can you afford to spend. Here's our tip that make sure your disciplined and you stick to it do it in cash. What you do is set aside that dollar amount. Start today saving just like you are doing that’s brilliant. Cut back on the lattes cut back on a dinner have your whole family contribute to the holiday fund and have it in cash. Then when the cash runs out, you have no more to spend on holiday spending and presents.
Fox: Now in an ideal world we cut back on these gifts altogether cause, I do think it has gotten out of control. I know that there’s retailers’ out there cringing when I say that because they make a living off of the season but really I mean, I think Americans go bloody overboard come the holidays.
Brad: There's no question we all go overboard. Part of that is we want to show our love and a passion for friends. Part of it is we are really marketed and sold to hey go out hit the malls, spend put it on your credit card and worry about it later. This is the worst time of the year to let the budget slip and to not pay close attention to your financial discipline.
Fox: Cash is the way to go you right you know what I love? That lay-a-way is back.
Brad: Well you know lay-away can be a very expensive way to buy things. If you self lay-away, which is you save up the cash yourself and you put it in an envelope and when you've got the cash then you go buy something its much smarter. Lay-away or even putting something on your credit card, it could cost you up to three times the cost of whatever you're buying.
Fox: But there are some interest free lay-a-ways’ out there right?
Brad: Don't let well interest free lay away is good interest free purchase is good. Be very careful about teaser rates though. The no interest no payment for 6 months 12 months, when the teaser period expires a lot of times, the small print says 25% APR or really break the budget kind of uh monthly payment that are going to come up and could really haunt you at a point when you may not be more financially stable.
Fox: So Brad, so what you're saying is basically your telling people to start saving now and to prepare and like unfortunately, its late right, in you really only have like two and a half months.
Brad: Well so it's late but it’s better now than never. I'd say the big ones are set that limit. Figure out what your budget is and set the limit. If you don't have the money today to make that to reach you what you want to spend, in the next two months you actually can have a make a real dent. Cut back on cell phone usage. Things like, do self created cards instead of going and buying cards for all your holiday presents could save you up to $50 bucks. Cut back on the lattes once a week, cut back on a dinner out with friends. Maybe bring your lunch to work. In the next two months you can find yourself having saved that $500 or $600 bucks that you need to spend for your friends and very importantly if you don't have that amount be very honest with your family and friends and even be honest with them tell them hey I love you I appreciate you. Please don't go into debt on account of me or buy me a present. I'd much rather let’s cook a meal together or do something together if it’s not within your means. If it is within your means great if it’s not be smart.
Fox: So I'm actually telling everyone now they are not getting gifts. I’m saying it, no gifts!
Brad: Well but different kind of gift okay. If you got the money, save it up and prioritize. If it's your spouse you certainly want to get them something special and be open and honest about what the limits are you're going to spend for each other. Don't try to outspend each other, to show you love the each other more than the other. If you really don't have the money just be honest with someone and say I'm going to make you a meal or I’m going to do something special for you in the next month or let's go for a great walk together and talk about what holiday season means to us. Great message for kids too and get away from a commercialized aspect of it or I have to spend to show you that I appreciate you.
Fox: Amen, you know another thing you noted was to go online and I tell ya the one thing I do do these days, is never make an online purchase without searching the web for an online coupon because they're they're everywhere.
Brad: Well there's two great things about shopping online. One is price comparison and given the state of the economy and how tough its been for retailers there's better deals than there’s ever been. So price comparison big benefit, the other is it’s very scary when you go to the mall. Stay disciplined and you don't want to buy for yourself when you're out holiday shopping for your loved ones. Online you can force some of that discipline on yourself. Make sure that holiday season you're not going above your budget and you’re only buying gifts for those people you've allocated for. You're not self indulging and just totally blowing the budget around the holiday season.
Fox: What about just giving gift cards? It controls the amount you know what you’re giving. You divvy up your budget in-between it split it all up give everyone a gift card and be done.
Brad: I think it’s great if that’s what they want, you know again, I'd share with them is. Something special sometimes has a lot more meaning than a gift card but if you've got the wherewithal I think there are some great presents out there like, make a small investment for that person, help them with budgeting. You know, buy some gold for them do something where it can help increase their wealth or solve some of their financial problems as well around the holiday season.
Fox: Brad those are some great tips I mean and I think the two big ones, use cash make a budget and use cash, cause really you can’t go wrong if that’s what you do.
Brad: Stick to the limit, use cash, and start saving today to build up and were swimming in just hundreds of people that come to our site and ask us these questions of Bills.com of how do I make my mortgage payment? How do I pay off my credit card debt and now when the holiday season comes I'm really concerned about how to keep up. Be really smart, have a game plan, and things will work out for you and your family.
Fox: Amen, Brad Stroh CEO, Co-CEO of Bills.com check out the website it's really cool, really user friendly.
Dealing with debt
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q2 2023 was $17.06 trillion. Auto loan debt was $1.582 trillion and credit card was $1.031 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Delaware, 29% have any kind of debt in collections and the median debt in collections is $1692. Medical debt is common and 16% have that in collections. The median medical debt in collections is $706.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.