4 Tips for Recovering from Holiday Debt
For many consumers, Christmas 2012 was made possible by a wallet full of credit cards. It often seems impossible to live within your means during the holiday season as you attempt to buy presents, bake goodies, entertain guests, travel, and participate in all the merry-making of the month! If you're struggling to recover from the debt you incurred over the past several weeks, follow these four tips to get out from under the burden of your credit cards.
- Assess your situation. It can be scary, but take a good look at your checking account and credit card balances. Knowing exactly how much you owe will help you figure out what steps are needed to eliminate your debt. Additionally, analyze how much money you're bringing in and how much is going out. Create a spending plan and stick to it to avoid falling deeper into debt.
- Beware of falling into the minimum payment trap! Making only the minimum payment every month can leave you trapped for months on end. You could end up paying off your Christmas 2012 debt well past Christmas 2014! If possible, commit to paying more than the minimum until you're debt-free. However, if you're struggling just to make your minimum payments, you may want to consider other options, like the Debt Management Plan.
- Find creative ways to pay extra. Find ways to cut certain expenses, or add more income to what you're already bringing in every month. Perhaps cutting out the cable bill or reducing dining out expenses will help. Others may find a little extra income through having a yard sale, or devoting their tax refund to paying off a credit card. Not only will creative changes help you pay off your debt, they may also lead to lifestyle adjustments that will keep you from falling into debt again!
- Plan for next year. Sit down and think about what you did right and what you did wrong. It may help to make a list. Did you overspend on gifts, groceries, entertainment, travelling, etc.? Which expenses were worthwhile, and which were unnecessary? Determine how you'll make changes so that Christmas 2013 can be debt-free . You may also consider opening a Christmas Club at your local bank or credit union, where you'll be able to set a little aside very month so that you'll have cash saved for Christmas next year.
If you need help paying off your debts (or if you'd like to talk to someone about preparing for Christmas 2013) contact us today by calling (423) 490-5620, emailing email@example.com, or chat online with a counselor now. We'd be delighted to provide you with some suggestions to assist you on your financial journey!