Did your recent holiday shopping carry some kind of stress?
Did you agonize over finding the perfect gift for Mom who already buys herself everything? Are you waiting until the eleventh hour and hoping for the best? Are you nervous about a shipping deadline? Or maybe you were just more generous to your loved ones than your wallet could afford this year.
Whatever the case, if opening up your credit card statements this season leaves you shocked, don’t panic. Planning, a little self-discipline, and these six steps will help you keep on top of your holiday debt.\
Set a goal and make a plan.
How many credit cards need to be paid off and by what date? Do you have debts spread across multiple credit cards? Give quick attention to your credit card bills, just one missed payment can hurt your credit score.
After you pay the minimum balance on all of your cards, let your credit cards cool off by putting them away and not using them. Then, set a goal for you debt-repayment plan and focus on whichever credit card has the highest interest rate. Wherever your holiday debt sits, you’ll need an action plan to pay it off.
Cut back in smart ways.
Cutting back has a bad reputation. People often immediately think of their favorite splurge – the one that they really value – and associate “cutting back” with losing that particular splurge. However, that’s the wrong perspective to take.
Focus your efforts in cutting back on the areas of your life that are less important to you; cut back hard on the things that don’t matter so that you can maintain the things that do. Once more of that “cutting back” money becomes available to you, resist the urge to spend it on wants. Instead, use that money to get rid of those holiday debts!
Think about consolidating debt.
After the holidays, many credit card companies offer balance transfers. This is where, if you sign up for their credit card, they’ll allow you to transfer the balance of one (or more) of your other credit cards to that new card, usually with a 0% interest rate on that transferred balance that can last as long as eighteen months.
Want to find one? The easiest method is to simply visit the website of a major credit card provider such as Chase, Citi, Discover, or Bank of America and see what they have to offer. The trick here is to not forget about the money you transferred just because you’re not paying interest on it right now. The goal by consolidating is just to keep that high interest at bay and use those 18 months at a 0% interest rate to knock down some of your debt.
Pick up a seasonal job.
We all know retailers are busier during the holidays, but instead of seeing this as an added nuisance, consider it a money-making opportunity. Every year, stores add to their staff with seasonal workers. You can cash in on this opportunity to raise funds for the holidays. These jobs are temporary, hourly positions that require little training and often offer flexible hours.
If money is already tight given your current paycheck, you might consider picking up some extra hours under seasonal employment to afford holiday expenses. Even if you only work on weekends, maybe picking up 10 extra hours a week, you will receive a couple hundred extra dollars to go towards paying down your debt.
The first major step toward reaching financial freedom following the holidays is to regain control of your spending and pay off any debt. Thankfully, technology is making it a lot easier to set and reach your goals. There are plenty of debt repayment tools out there that can help you stick to your plan such as Unbury.Me, an online loan calculator that helps you discover an optimized plan to minimize interest and get debt free as fast as possible.
You should also set payment reminders on your phone or through your email with your current card providers and utilize automatic bill pay whenever possible.
Finally, tell someone.
Tell a trusting person your goal and plan. Just like with a new workout regime a trusted friend can help you stay on track!
Learn more about retirement and finances by clicking here