5 Tips For Paying Off Your Christmas Debt
For the majority of people, Christmas is viewed as the most delightful time of year for both young and old. Most of us are inspired to wrap up the year of work or school and devote some quality time with family and friends. They don’t refer to it as the silly season for nothing either. Eating and spending too much is the norm and it’s remarkably easy to lose track of your savings and your waistline! Taking a hard-earned holiday is important for our psychological health, so it’s easy to overindulge in presents and vacations during the festive season. But alas, the new year comes around soon enough and we can all start a fresh slate. Time to make some resolutions and prepare for the year in advance.
Before we realise it, we’re back in the same schedule. Work, school, bills, stress. But what if you’re in the scenario where you spent excessively throughout the festive season and now you’re in debt? Well, don’t be alarmed, it happens to many people during this time of year. Luckily we’ve got some techniques on how you can successfully pay off your Christmas debts in a timely fashion.
Make a list of your debts
The first step in clearing your Christmas debts is to evaluate how much you owe. Find a pen and paper and list all the debts you have, alongside the creditor’s, interest rates, next repayment date and repayment amounts. Try to be conservative here and list every single debt you have, no matter how big or small. After you’ve determined your repayment amounts, you’ll need to work out a plan on paying off the principal, which leads us to our next recommendation.
Don’t forget that debts includes both interest repayments and principals. Paying the interest only will doing nothing long-term, so once you’ve figured out your repayment amounts, the next step is to create a plan on paying off the principal. It’s generally best to concentrate on the highest interest rate debts initially which will save you money in the long run. Interest on loans are a formidable force and can cripple your finances if you don’t take care. You likewise may wish to list your income streams too so you can calculate how much will be left over for living expenses. This will assist you in our next tip, creating a budget.
To ensure you can still enjoy the year ahead, you’ll really want to repay your Christmas debt inside the first quarter of the year, so establishing a budget and adhering to it is obligatory. If you’ve had trouble sticking to a budget in the past, there are loads of great smartphone apps that can assist you with maintaining your budget. Just because you’re on a budget doesn’t imply you can’t have any fun either. There are plenty of free and inexpensive activities available, you just have to alter your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
While it may sound apparent, the quickest way to pay off debt is to increase your savings and stay clear of unnecessary expenses. You might want to stop dining in restaurants once a week which can save you a surprising amount of money. Or you can catch public transport to work to save money on gas. If you feel inclined, chop up your credit cards! Do whatever you need to do to save money – being penny-wise is very important. Get in control of your spendings and save as much as possible; you don’t want your holiday debt hangover to continue until next Christmas!
Monitor your progress
Review your progression every month to discover how well your plan is performing. You might need to make some changes if needed, and you’ll have a better idea of what changes are realistic depending on the previous month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to celebrate your success. A reward doesn’t have to cost an exorbitant amount of money, but it will enhance your motivation to stick to your plan in times of need. By budgeting and monitoring your development, you’ll have better financial skills and hopefully won’t be stuck in the same position next Christmas!
If you can’t manage your debts, seek advice immediately
If you’ve genuinely tried to at least decrease your debts in a timely fashion and haven’t prevailed, you may be experiencing financial hardship. Instead of waiting and paying an increasing amount of interest, it’s better to seek advice from the experts before your situation becomes worse. There are many options available for those in financial hardship and they vary depending on your individual circumstances. For a confidential discussion on how to efficiently manage your debts, call Bankruptcy Experts Tablelands on 1300 795 575 or visit www.bankruptcyexpertstablelands.com.au