If you are like I am, you probably spent a little too much on gifts for friends, family and yourself. Don’t be one those consumers who are still paying off holiday debts from previous years and adding to your debt with new purchases racked up over the past holiday season. This will only will inflate your credit card interest charges and make paying down the old and new balances more difficult and expensive.
If the bottom line on your bills is looking ugly, it’s time to get a financial-management makeover.
Tips to Managing Holiday Debt
1. Double and Triple Up
Multiply your credit card minimum payments two or three times to reduce the amount of interest you’ll end up paying. Merely meeting the minimum is not enough otherwise you will be paying it off for years.
2. Now’s the Time to Negotiate
Contact your credit card company about negotiating a better rate on interest, fees, and other expenses. Don’t forget that if they not willing to negotiate and your interest rate is 15 percent or higher, consider to transferring your balance to a lower-cost card. If you choose to do a balance transfer, make sure you pay off the debt before the interest rate climbs again.
3. Go On a No-spend Diet
Stick those credit cards in the freezer, if you have to, but do what it takes to avoid impulse shopping sprees. Better yet, give them to a trusted friend or family member for safekeeping.
4. Use Coupons to Save
I have become quite good a couponing especially at stores I use regularly. It goes without saying that using coupons for necessary purchases not only saves you money, but the practice helps you make more educated purchasing decisions. There are so many online and printable coupons. I also suggest downloading their mobile app to get instant access to coupons. For me, I have started shopping at Whole Foods only because I am an Amazon Prime member. Look for the yellow signs which indicate that Prime members get an extra 10% off those items (excluding alcohol)and the blue sale signs indicate special deals only available to Prime members. That said, I only buy what is on sale and nothing more!
5. Use Cash Only
This seems to work for many people. Take out a weekly budgeted amount on hand and stay away from the cards.
6. Cut Back on Luxuries
Everyone has a different idea what a luxury is so you need to be honest about your needs and wants as I like to call it. For me, luxuries include restaurants, lunches and take out. For some, you need to cut back on weekly mani/pedis or getting a daily coffee. I know that if you are like me if I say NO to everything, it feels too restrictive and just go back to my old habits. Try to maintain a balance and maybe allow yourself an occasional, small splurge to keep you going.
7. Set Small Goals
Don’t try to do everything at once. If paying off credit cards in three months means going hungry, you’re biting off more than you can chew. Set smaller, obtainable goals and you’ll appreciate the final results more. For those with multiple credit cards with high balances, try paying down one card at a time to feel that sense of accomplishment needed to push on to the next goal.
8. Meet With a Financial Planner
If you’re barely treading financial water, it’s time to get some assistance. A professional financial planner can help you establish a reasonable plan that won’t leave you paying off debts until next Christmas. You can find a qualified guide through the Certified Financial Planner Board of Standards website or you might check for non-profit assistance.
PIN THIS
Disclosure: This post may contain affiliate links. If you buy something from one of the linked sites you won’t pay anything more, but I might make a commission.