|March 22, 2017||Comments Closed|
For the majority of people, Christmas is viewed as the most joyful time of year for both young and old. Most of us are delighted to finish the year of work or school and spend 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 really easy to lose track of your savings and your waistline! Taking a hard-earned break is critical for our emotional health, so it’s easy to overindulge in presents and family holidays 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 schedule. Work, school, bills, stress. But what if you’re in the situation where you spent a bit too much in the course of the festive season and now you’re in debt? Well, don’t be alarmed, it happens to plenty of people during this time of year. Fortunately we’ve got some suggestions on how you can proficiently clear your Christmas debts in a timely fashion.
Create a list of your debts
The very first step in repaying your Christmas debts is to find out how much you owe. Find a pen and paper and list all of the debts you have, coupled with the creditor’s, interest rates, next repayment date and repayment amounts. Try to be conservative here and list every single debt you have, irrespective 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 brings us to our next suggestion.
Don’t forget that debts comprise of both interest repayments and principals. Paying the interest only will doing nothing long-term, so once you’ve discovered your repayment amounts, the next step is to make a plan on paying off the principal. It’s typically 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 powerful force and can debilitate your finances if you don’t take care. You additionally might wish to list your income streams too 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 ensure you can still enjoy the year ahead, you’ll want to repay your Christmas debt inside the first quarter of the year, so establishing a budget and adhering to it is crucial. If you’ve had problems following a budget in the past, there are loads of great smartphone apps that can support you with managing 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-priced 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 easiest way to pay off debt is to grow your savings and stay clear of unnecessary expenses. You might want 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, cut up your credit cards! Do whatever you need to do to save money – being penny-wise is imperative. Get in control of your expenditures and save as much as possible; you don’t want your holiday debt hangover to continue until next Christmas!
Monitor your progress
Review your progression monthly to discover how well your plan is performing. You might prefer to make some changes if required, 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 achievement. A reward doesn’t have to cost an enormous 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 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 becomes 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 properly manage your debts, call Bankruptcy Experts Mount Isa on 1300 795 575 or visit www.bankruptcyexpertsmountisa.com.au