|March 21, 2017||Comments Closed|
For most people, Christmas is seen as the most splendid time of year for both young and old. Most of us are ecstatic to wind up the year of work or school and spend some quality time with family and friends. They don’t refer to it as the silly season for nothing either. Eating and spending a bit too much is the norm and it’s pretty easy to lose track of your savings and your waistline! Enjoying a hard-earned holiday is crucial for our psychological health, so it’s easy to overindulge in gifts and getaways during the festive season. But alas, the new year comes around soon enough and we can all start a fresh slate. Time to make some resolutions and plan out the year ahead.
Before we recognise it, we’re back in the same habits. Work, school, bills, stress. But what if you’re in the predicament where you spent a bit too much during the festive season and now you’re in debt? Well, don’t be paniced, it happens to plenty of people during this time of year. Luckily we’ve got some ideas on how you can proficiently clear your Christmas debts in a timely fashion.
Produce a list of your debts
The first step in paying off your Christmas debts is to evaluate how much you owe. Grab a pen and paper and list each of the debts you have, along with the creditor’s, interest rates, next repayment date and repayment amounts. Aim to be conservative here and list every debt you have, no matter how big or small. After you’ve figured out your repayment amounts, you’ll have to work out a plan on paying off the principal, which leads us to our next tip.
Remember that debts includes both interest repayments and principals. Paying the interest only will doing nothing long-term, so once you’ve figured out your repayment amounts, the next step is to devise a plan on paying off the principal. It’s generally best to concentrate on the highest interest rate debts initially which will save you money in the long run. Interest on loans are a formidable force and can maim your finances if you don’t take care. You also might want to list your income streams simultaneously so you can work out how much will be left over for living expenses. This will assist you in our next tip, creating a budget.
To make sure you can still enjoy the year ahead, you’ll want to clear your Christmas debt within the first quarter of the year, so developing a budget and adhering to it is imperative. If you’ve had issues adhering to a budget before, there are plenty of great smartphone apps that can support you with managing your budget. Just because you’re on a budget doesn’t imply you can’t have any fun either. There are loads of free and low-priced activities available, you just have to alter your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Whilst it may sound apparent, the most basic way to pay off debt is to grow your savings and stay away from unnecessary expenses. You might plan to stop dining in restaurants once a week which can save you a surprising amount of money. Or you can catch public transport to work to save money on fuel. If you feel inclined, cut up your credit cards! Do whatever you have to do to save money – being prudent is imperative. Get in control of your spendings and save as much as possible; you don’t want your holiday debt hangover to continue until the following Christmas!
Track your progress
Review your progress each month to see how well your plan is performing. You might need to make some changes if required, and you’ll have a better idea of what changes are realistic based upon the past month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to celebrate your achievement. A reward doesn’t need to cost an enormous amount of money, but it will raise your motivation to stick to your plan in times of need. By budgeting and monitoring your development, you’ll have better financial skills and hopefully won’t be stuck in the same position next Christmas!
If you can’t manage your debts, seek advice immediately
If you’ve genuinely tried to at least reduce your debts in a timely fashion and haven’t prevailed, you may be experiencing financial hardship. Instead of waiting and paying more and more interest, it’s better to seek advice from the experts before your situation becomes worse. There are many options available for those in financial hardship and they vary depending upon your individual circumstances. For a confidential discussion on how to successfully manage your debts, call Bankruptcy Bendigo on 1300 818 575 or visit http://www.bankruptcy-bendigo.com.au/