For the majority of people, Christmas is considered the most joyous time of year for both young and old. We all are thrilled 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 rather easy to lose track of your savings and your waistline! Enjoying a hard-earned break is vital for our psychological health, so it’s easy to overindulge in presents and getaways during the festive season. But alas, the new year arrives soon enough and we can all start a fresh slate. Time to make some resolutions and prepare for the year ahead.
Before we realise it, we’re back in the same routine. Work, school, bills, stress. But what if you’re in the predicament where you spent too much throughout the festive season and now you’re in debt? Well, don’t be distressed, it happens to numerous people during this time of year. Thankfully we’ve got some techniques on how you can efficiently clear your Christmas debts in a timely fashion.
Produce a list of your debts
The first step in clearing your Christmas debts is to understand how much you owe. Get hold of a pen and paper and list all of the debts you have, in conjunction with the creditor’s, interest rates, next repayment date and repayment amounts. Try to be conservative here and list every debt you have, regardless of how big or small. Once you’ve discovered your repayment amounts, you’ll have to devise a plan on paying off the principal, which leads us to our next suggestion.
Keep in mind that debts consist of both interest repayments and principals. Paying the interest only will doing nothing long-term, so after you’ve figured out your repayment amounts, the next step is to create a plan on paying off the principal. It’s generally best to focus on the highest interest rate debts to begin with which will save you money over time. Interest on loans are a powerful force and can stifle your finances if you don’t take care. You similarly may want to list your income streams at the same time 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 ahead, you’ll want to pay off your Christmas debt within the first quarter of the year, so establishing a budget and adhering to it is obligatory. If you’ve had difficulty sticking to a budget before, there are a number of great smartphone apps that can assist you with maintaining your budget. Just because you’re on a budget doesn’t imply you can’t have any fun either. There are a lot of free and low-cost activities available, you just have to adjust your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Though it may sound apparent, the easiest way to pay off debt is to increase your savings and refrain from unnecessary expenses. You might need to stop eating out once a week which can save you a surprising amount of money. Or you can catch public transport to work to save money on gas. If you feel inclined, cut up your credit cards! Do whatever you have to do to save money – being prudent is very important. 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
Assess your progress each month to see how well your plan is performing. You might wish to make some changes if needed, and you’ll have a better idea of what changes are reasonable based upon the previous month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to commemorate your success. A reward doesn’t have to cost an exorbitant amount of money, but it will raise your motivation to stick to your plan in times of need. By budgeting and tracking your progression, 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 sincerely 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 a growing 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 on your individual circumstances. For a confidential discussion on how to successfully manage your debts, call Bankruptcy Dubbo on 1300 818 575 or visit http://www.bankruptcy-dubbo.com.au/