5 Tips For Repaying Your Christmas Debt
For the majority of people, Christmas is viewed as the most pleasant time of year for both young and old. We all are ecstatic to finalise 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 psychological health, so it’s easy to overindulge in gifts and vacations during the festive season. But alas, the new year comes around soon enough and we can all start afresh. Time to make some resolutions and prepare for the year in advance.
Before we know it, we’re back in the same schedule. Work, school, bills, stress. But what if you’re in the predicament where you spent excessively throughout the festive season and now you’re in debt? Well, don’t be spooked, it happens to many people during this time of year. Thankfully we’ve got some strategies on how you can successfully repay your Christmas debts in a timely fashion.
Produce a list of your debts
The first step in paying off your Christmas debts is to figure out 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 single debt you have, irrespective of how big or small. After you’ve determined your repayment amounts, you’ll need to devise a plan on paying off the principal, which leads us to our next recommendation.
Bear in mind that debts comprise of both interest repayments and principals. Paying the interest only will doing nothing long-term, so once you’ve worked out your repayment amounts, the next step is to devise a plan on paying off the principal. It’s normally best to concentrate on the highest interest rate debts to begin with 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 additionally might want to list your income streams as well 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 you can still enjoy the year ahead, you’ll want to pay off your Christmas debt within the first quarter of the year, so creating a budget and following it is essential. If you’ve had trouble adhering to a budget previously, there are loads of great smartphone apps that can support 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 number of free and affordable activities available, you just need to alter your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Although it may sound obvious, the simplest way to pay off debt is to increase your savings and steer clear of unnecessary expenses. You might like 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, chop up your credit cards! Do whatever you need to do to save money – being penny-wise is extremely important. 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
Review your progression each month to see 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 based on the previous month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to celebrate your success. 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 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 honestly tried to at least reduce your debts in a timely fashion and haven’t succeeded, 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 gets worse. There are many options available for those in financial hardship and they vary according to your individual circumstances. For a confidential discussion on how to successfully manage your debts, call Bankruptcy Canberra on 1300 818 575 or visit http://www.bankruptcy-canberra.com.au/