For most people, Christmas is viewed as the most delightful time of year for both young and old. Most of us are thrilled to finalise the year of work or school and enjoy some quality time with family and friends. They don’t call it the silly season for nothing either. Eating and spending too much is the norm and it’s very easy to lose track of your savings and your waistline! Taking a hard-earned holiday is essential for our psychological health, so it’s easy to overindulge in gifts and holidays 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 in advance.
Before we know it, we’re back in the same routine. Work, school, bills, stress. But what if you’re in the scenario where you spent a bit too much throughout the festive season and now you’re in debt? Well, don’t be distressed, it happens to lots of people during this time of year. Thankfully we’ve got some suggestions on how you can effectively clear your Christmas debts in a timely fashion.
Produce a list of your debts
The very first step in clearing your Christmas debts is to work out how much you owe. Find a pen and paper and list all of the debts you have, in addition to the creditor’s, interest rates, next repayment date and repayment amounts. Aim to be conservative here and list every single debt you have, regardless of how big or small. Once 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 recommendation.
Don’t forget that debts are composed 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 typically best to concentrate on the highest interest rate debts first which will save you money down the road. Interest on loans are a powerful force and can maim your finances if you don’t take care. You likewise might want to list your income streams also 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 ensure that you can continue to enjoy the year in advance, you’ll really want to repay your Christmas debt within the first quarter of the year, so setting up a budget and sticking to it is critical. If you’ve had issues adhering to a budget in the past, there are lots of great smartphone apps that can help you with maintaining your budget. Just because you’re on a budget doesn’t mean you can’t have any fun either. There are an abundance of free and inexpensive activities available, you just need to alter your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Whilst it may sound obvious, the quickest way to pay off debt is to grow your savings and stay away from unnecessary expenses. You might want 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 prudent is essential. Get in control of your expenses and save as much as possible; you don’t want your holiday debt hangover to last until the following Christmas!
Monitor your progress
Assess your progression monthly to discover how well your plan is performing. You might want to make some changes if required, and you’ll have a better idea of what changes are rational depending on the past month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to commemorate your accomplishment. A reward doesn’t have to cost an outrageous amount of money, but it will increase 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 seriously tried to at least decrease your debts in a timely fashion and haven’t prevailed, 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 efficiently manage your debts, call Bankruptcy Cassowary Coast on 1300 818 575 or visit http://www.bankruptcy-cassowarycoast.com.au/