It’s not that hard to get behind during the holidays. You see the perfect thing for your best friend, but it’s just over your budget. Or maybe you want to make sure your kids have the most current popular gifts this year to make the holidays special. And presents are only a small portion of the money we spend over the holidays. With parties, extra tips, new clothes, and even New Year’s Eve celebrations, the money can add up quickly.
Now that we’ve started the New Year, how can you review your budget to reconcile your debt quickly before it spirals out of control? Here are a few simple tips:-
Keep it Separate
Before the holidays, get a separate card just for holiday spending. It’s never too late, either. If you didn’t do this, you can find a card that offers 0% on balance transfers and move your debt there.
This allows you to maintain payments on any other consumer debt as well as bills and still have access to an interest-free grace period for your holiday debts.
Return What You Don’t Need
It’s the thought that counts, right? If you receive gifts that you simply won’t use, don’t be afraid to return them. You can also take a look at what your kids are or are not using since they opened gifts on Christmas morning. If they don’t like it, don’t keep it. Duplicate items? One goes back.
Also, take a look at any impulse purchases you made for yourself over the holidays. Are you really going to use it or did you just get caught up in the buying frenzy? Return these items and have the money put back on your card. Don’t allow them to give you only store credit or use it as an excuse to buy something else.
Look into Debt Consolidation
For some consumers, debt consolidation may be a viable choice. But always do thorough research. Not everyone will qualify for programs and not every program can live up to the promises.
Debt consolidation is simply a way to refinance your loan and get extended payment terms. This may or may not be useful to help you pay off your debt or help you in the future as each individual’s experience will vary. There may be other ways you can leverage your assets to help pay off debt as well.
Make the Minimum Payment and More
Don’t allow holiday debt get you into a deeper hole. Make sure that each month you’re sending the minimum payment to any credit cards you hold. If you can, send them at least double the amount each month.
The more you pay each month, the less time it will take to pay it. But you need to do this in conjunction with the next tip.
Cut Back on Expenses for the Year
Even as you pay your credit cards, it will do little to help your consumer debt if you continue to spend. Take time to reevaluate your entire budget. What can you cut that you don’t need? Maybe you have a gym membership that you don’t use. Or maybe you subscribe to too many streaming television services and could cut back.
You should also look at the amount of time you go out and what you can do for entertainment or meals in your home. This can save you a lot of money over the course of the year.
If you’ve spent a little too much over the holidays, know that it’s never too late to recover from that. Take time to evaluate the ways you can pay off your debt and save more money throughout the year.