How To Tackle Your Holiday Debt
Holiday seasons represent costs and huge expenses. It’s the time of the year that is known for family gatherings, parties, presents, and of course, sumptuous food. Some people during this season also pack holiday debt aside from packing gifts. Though starting a year with more stable finances, others may start the year with loads of debt.
Going beyond your means during holidays is likely to happen if you rely more on your credit card and haven’t anticipated or saved some money for possible expenses. If you are on target to pay off your outstanding credit card balances, you might as well removed from your wallet and monitor your spending for this season. Besides, it helps a lot if you already set aside a certain budget for this holiday.
Create a Plan to Pay Off Your Debt
Take your debt seriously and be aware of where you stand. You need to know how much debt you owe. This includes all forms of debt and the debt that you are carrying before the holidays. After you have determined the exact figure, check how much disposable income can you set aside for your debt payments. Through this, you’ll be able to find out how many months will it take you to pay off your debts with your free cash.
Start with the Highest Interest or Most Expensive Debt
To pay off your debt, you can start with the one that has the highest interest charges while paying the minimum payments for the rest of your debts. You can also try getting a consolidation loan to pay off all your debts and lower your interest payments. The key to knocking down your debts real fast is to pay more than the minimum payment each month. This is the reason why paying the minimum will not significantly lower the duration of your indebtedness.
Return The Stuff that Is Not Used
We get a bunch of Christmas presents that we don’t even use. If given the chance, try returning what you can return in exchange for cash and gift cards. Besides, you can sett anything online or set up a yard sale rather than letting those stuff idle in your closet.
Paid It Off Before Going On A Shopping
Make it a point not to hit your usual mall hopping until you haven’t settled what you owe. Remember, your main focus is to pay off your debt; hence, you should be wise to determine your needs over your wants.
We all know that frugality is one of the most efficient approaches when facing debt issues. To help you knock down your holiday debt, you might need to find free entertainment and other creative alternatives to recreate your social life. Moreover, instead of paying for certain hobbies or interest, might as well try to look for frugal hobbies that will yield the same benefit without hurting your finances.
Utilize Your Resources
Though you can still save while dining out, it’s best that you make use of your resources at home and prepare creative meals. By doing so you ensure that you’re eating healthy. Other than that, you can also use your bike, go for a run or walk instead of paying your gym membership. Also, instead of using your car all the time, why not use your bike to get some errands in a nearby shop. The bottom line is to make use of what you can and save as much as you can.
Learn From The Past
You should remind yourself and keep a flashback of your credit card statement as a way to shun you from spending beyond your means. Whether your spending on Halloween or on significant Holidays, drawing yourself into reality and realizing the consequences of your decision will serve as your guide the next time you’re facing the same situation.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.