5 Tips For Repaying Your Christmas Debt
For many people, Christmas is seen as the most joyous time of year for both young and old. All of us are ecstatic to finish the year of work or school and enjoy 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 rather easy to lose track of your savings and your waistline! Taking a hard-earned break is crucial for our emotional health, so it’s easy to overindulge in presents and getaways during the festive season. But alas, the new year comes around soon enough and we can all start anew. Time to make some resolutions and prepare for 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 far too much during the festive season and now you’re in debt? Well, don’t be paniced, it happens to numerous people during this time of year. Luckily we’ve got some tips 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 determine how much you owe. Grab a pen and paper and list all the debts you have, as well as the creditor’s, interest rates, next repayment date and repayment amounts. Aim to be conservative here and list every debt you have, regardless of how big or small. After you’ve worked out your repayment amounts, you’ll need to devise a plan on paying off the principal, which leads us to our next recommendation.
Always remember that debts comprise of 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 create a plan on paying off the principal. It’s usually best to concentrate on the highest interest rate debts first which will save you money over time. Interest on loans are a formidable force and can debilitate your finances if you don’t take care. You likewise may want to list your income streams too so you can calculate how much will be left over for living expenses. This will assist you in our next tip, creating a budget.
To make sure that you can continue to enjoy the year in advance, you’ll need to repay your Christmas debt inside the first quarter of the year, so establishing a budget and following it is essential. If you’ve had trouble following a budget previously, there are a number of great smartphone apps that can support you with maintaining your budget. Just because you’re on a budget doesn’t suggest you can’t have any fun either. There are loads of free and affordable activities available, you just need to change your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Though it may sound obvious, the simplest way to pay off debt is to increase your savings and refrain from unnecessary expenses. You might choose 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, chop up your credit cards! Do whatever you have to do to save money – being penny-wise is imperative. Get in control of your expenses and save as much as possible; you don’t want your holiday debt hangover to last until next Christmas!
Track your progress
Assess your progress each month to discover how well your plan is performing. You might prefer to make some changes if required, and you’ll have a better idea of what changes are practical depending on the previous month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to celebrate your accomplishment. A reward doesn’t need to cost an outrageous amount of money, but it will enhance your motivation to stick to your plan in times of need. By budgeting and tracking 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 honestly tried to at least decrease your debts in a timely fashion and haven’t been successful, you may be experiencing financial hardship. Instead of waiting and paying an increasing amount of 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 adequately manage your debts, call Bankruptcy Experts Geelong on 1300 795 575 or visit www.bankruptcyexpertsgeelong.com.au