For most people, Christmas is seen as the most jubilant time of year for both young and old. We all 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 too much is the norm and it’s remarkably easy to lose track of your savings and your waistline! Enjoying a hard-earned break is necessary for our emotional 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 plan for the year in advance.
Before we know it, we’re back in the same habits. Work, school, bills, stress. But what if you’re in the position where you spent way too much throughout the festive season and now you’re in debt? Well, don’t be startled, it happens to loads of people during this time of year. The good thing is we’ve got some techniques on how you can efficiently 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 work out how much you owe. Find a pen and paper and list all the debts you have, together 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 discovered your repayment amounts, you’ll need to work out a plan on paying off the principal, which brings us to our next suggestion.
Remember that debts comprise of both interest repayments and principals. Paying the interest only will doing nothing long-term, so when you’ve discovered your repayment amounts, the next step is to devise 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 in the future. Interest on loans are a formidable force and can maim your finances if you don’t take care. You additionally may wish to list your income streams also so you can determine 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 need to settle your Christmas debt within the first quarter of the year, so putting together a budget and sticking to it is essential. If you’ve had problems following a budget previously, there are a lot of great smartphone apps that can help you with maintaining your budget. Just because you’re on a budget doesn’t suggest you can’t have any fun either. There are an abundance of free and affordable activities available, you just have to adjust your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Though it may sound apparent, the quickest way to pay off debt is to grow your savings and stay clear of unnecessary expenses. You might need to stop eating in restaurants once a week which can save you a surprising amount of money. Or you can catch public transport to work to save money on fuel. If you feel inclined, cut up your credit cards! Do whatever you have to do to save money – being prudent is imperative. Get in control of your spendings and save as much as possible; you don’t want your holiday debt hangover to continue until next Christmas!
Track your progress
Evaluate your progress every month to discover how well your plan is performing. You might want to make some changes if needed, 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 celebrate your accomplishment. A reward doesn’t need to cost an enormous amount of money, but it will enhance 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 been successful, 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 upon your individual circumstances. For a confidential discussion on how to appropriately manage your debts, call Bankruptcy Experts Parramatta on 1300 795 575 or visit www.bankruptcyexpertsparramatta.com.au