For most people, Christmas is considered the most joyous time of year for both young and old. All of us are delighted to wrap up 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 very easy to lose track of your savings and your waistline! Enjoying a hard-earned holiday is critical for our psychological health, so it’s easy to overindulge in presents and holidays during the festive season. But alas, the new year arrives 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 routine. Work, school, bills, stress. But what if you’re in the position where you spent far too much during 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. Fortunately we’ve got some techniques on how you can proficiently repay your Christmas debts in a timely fashion.
Make a list of your debts
The very first step in clearing your Christmas debts is to discover how much you owe. Grab a pen and paper and list all 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 debt you have, irrespective of how big or small. Once you’ve worked out 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 are composed 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 create a plan on paying off the principal. It’s usually best to concentrate on the highest interest rate debts first which will save you money over time. Interest on loans are a powerful 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 that you can continue to enjoy the year in advance, you’ll want to clear your Christmas debt inside the first quarter of the year, so establishing a budget and sticking to it is vital. If you’ve had difficulty sticking to a budget before, there are plenty of great smartphone apps that can help you with sustaining your budget. Just because you’re on a budget doesn’t imply you can’t have any fun either. There are an abundance 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
While it may sound obvious, the easiest way to pay off debt is to increase your savings and steer clear of unnecessary expenses. You might plan to stop dining in restaurants once a week which can save you a surprising amount of money. Or you could catch public transport to work to save money on fuel. If you feel inclined, chop up your credit cards! Do whatever you have to do to save money – being frugal is fundamental. Get in control of your spendings and save as much as possible; you don’t want your holiday debt hangover to last until the following Christmas!
Track your progress
Evaluate your progression every month to discover how well your plan is performing. You might wish to make some changes if required, and you’ll have a better idea of what changes are rational depending 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 have to cost an extravagant amount of money, but it will increase 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 really tried to at least decrease 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 worsens. There are many options available for those in financial hardship and they vary depending upon your individual circumstances. For a confidential discussion on how to effectively manage your debts, call Bankruptcy Experts Gladstone on 1300 795 575 or visit www.bankruptcyexpertsgladstone.com.au