Merry Christmas – you’re in debt.
The holidays can be a happy and joyous time. However, after the holidays, many consumers are finally hit with the realization of just how much they spent to give their loved ones “the perfect holiday” or “the perfect gift”.
If you’ve wracked up a load of debt on your credit cards, it’s never too early to start to pay off holiday debt. In fact, you can begin before you even get the first credit card statement.
Here are some tips to help you pay off holiday debt quickly and not pay more than you have to…
Know What You Owe
It can be tempting to shove those unopened credit card statements to the side until later, but this will not help you on your quest to pay off holiday debt. Use a dedicated manila folder or envelope to hold all of your credit card or loan statements. When you finally add up the damage what you owe, write it in on the front of the envelope. As you make payments, cross the old total off and write in the new total. This way, you can easily see exactly what you owe and watch your debt go down, giving you more encouragement to pay off holiday debt quickly.
Create a Budget
Write down all sources of income and what you spend every week or month. This will help you determine exactly what you can afford to put toward your holiday debt.
Stop Spending as Much
This is probably one of the hardest steps for anyone trying to pay off holiday debt quickly. However, it’s an essential one. Take a good look at your budget, and decide which expenses are necessary – utilities, housing, loan payments – and which ones aren’t – movie subscriptions, dinners out, monthly salon visits. Stop spending money on anything that isn’t absolutely necessary, and stop spending as much on the necessities. Use coupons when you go grocery shopping, for instance. Also, stop using your credit cards, if possible. Adding more debt on top of your existing debt will only make it harder to pay off holiday debt quickly.
Make Frequent Payments Above the Minimum
You don’t have to wait for your credit card statements to come in the mail before you make a payment. To make sure you make a payment on time and avoid the possibility that you’ll be charged interest. You should also make payments larger than the minimum payment amount if you’re trying to pay off holiday debt quickly. Not only will this bring your balance down sooner, but it will also help you save money on interest.
Consider a Part-time Income
Extra income will definitely help you pay off holiday debt quickly. Take your net income from part-time work – minus any expenses like transportation – and put it all toward the balance of your holiday debt. If your schedule doesn’t allow you to get a part-time job, consider doing something to make a little extra cash from home.
Use “Free” Money to Help Pay Off Holiday Debt
I refer to any money that I didn’t work to earn as “free money”. This includes gifts from other people, holiday bonuses, rebates, lottery and contest winnings, and tax refunds. If you’re trying to pay off holiday debt quickly, put all of the “free money” you get toward the balance of your debt.
