For many people, Christmas is considered the most splendid time of year for both young and old. Most of us are thrilled to wrap up 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 a bit too much is the norm and it’s pretty easy to lose track of your savings and your waistline! Taking a hard-earned holiday is necessary for our emotional 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 plan out the year ahead.
Before we recognise it, we’re back in the same schedule. Work, school, bills, stress. But what if you’re in the position where you spent a bit too much during the course of the festive season and now you’re in debt? Well, don’t be distressed, it happens to loads of people during this time of year. The good thing is we’ve got some ideas on how you can proficiently repay your Christmas debts in a timely fashion.
Make a list of your debts
The very first step in paying off your Christmas debts is to determine how much you owe. Find 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. Try to be conservative here and list every single debt you have, no matter how big or small. When you’ve worked out your repayment amounts, you’ll need to work out a plan on paying off the principal, which leads us to our next tip.
Don’t forget that debts consist of both interest repayments and principals. Paying the interest only will doing nothing long-term, so after you’ve worked out your repayment amounts, the next step is to devise a plan on paying off the principal. It’s typically best to concentrate on the highest interest rate debts initially which will save you money over time. Interest on loans are a powerful force and can debilitate your finances if you don’t take care. You likewise may wish to list your income streams simultaneously 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 make sure you can still enjoy the year ahead, you’ll want to clear your Christmas debt within the first quarter of the year, so putting together a budget and adhering to it is vital. If you’ve had issues adhering to a budget before, there are plenty of great smartphone apps that can support you with maintaining your budget. Just because you’re on a budget doesn’t signify you can’t have any fun either. There are plenty of free and low-priced activities available, you just need to change your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Although it may sound obvious, the easiest way to pay off debt is to grow your savings and steer clear of unnecessary expenses. You might need to stop eating out once a week which can save you a surprising amount of money. Or you could catch public transport to work to save money on gas. If you feel inclined, chop up your credit cards! Do whatever you have to do to save money – being frugal is critical. Get in control of your spendings and save as much as possible; you don’t want your holiday debt hangover to last until next Christmas!
Track your progress
Assess your progression monthly to discover how well your plan is performing. You might intend to make some changes if required, and you’ll have a better idea of what changes are rational based upon 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 need 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 monitoring your progress, 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 a growing 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 depending on your individual circumstances. For a confidential discussion on how to properly manage your debts, call Bankruptcy Cairns on 1300 818 575 or visit http://www.bankruptcy-cairns.com.au/