For many people, Christmas is viewed as the most joyous time of year for both young and old. Most of us are inspired to wind up the year of work or school and devote some quality time with family and friends. They don’t refer to it as the silly season for nothing either. Eating and spending too much is the norm and it’s rather easy to lose track of your savings and your waistline! Taking a hard-earned holiday is crucial for our psychological health, so it’s easy to overindulge in gifts 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 in advance.
Before we know it, we’re back in the same schedule. Work, school, bills, stress. But what if you’re in the situation where you spent too much throughout the festive season and now you’re in debt? Well, don’t be distressed, it happens to lots of people during this time of year. Fortunately we’ve got some techniques on how you can successfully pay off 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. Take a pen and paper and list all the debts you have, as well as the creditor’s, interest rates, next repayment date and repayment amounts. Try to be conservative here and list every single debt you have, regardless of how big or small. Once you’ve worked out your repayment amounts, you’ll need to devise a plan on paying off the principal, which brings us to our next tip.
Bear in mind that debts includes both interest repayments and principals. Paying the interest only will doing nothing long-term, so when you’ve worked out your repayment amounts, the next step is to devise a plan on paying off the principal. It’s always best to focus on the highest interest rate debts to start with which will save you money over time. Interest on loans are a formidable force and can stifle your finances if you don’t take care. You additionally might want to list your income streams at the same time 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 make sure you can still enjoy the year in advance, you’ll want to pay off your Christmas debt within the first quarter of the year, so developing a budget and adhering to it is imperative. If you’ve had difficulty following a budget in the past, there are plenty of great smartphone apps that can help you with maintaining your budget. Just because you’re on a budget doesn’t indicate you can’t have any fun either. There are a lot of free and low-priced activities available, you just have to change your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Though it may sound evident, the simplest way to pay off debt is to increase your savings and steer clear of unnecessary expenses. You might want to stop dining 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 gas. If you feel inclined, cut up your credit cards! Do whatever you need to do to save money – being penny-wise is extremely important. Get in control of your spendings and save as much as possible; you don’t want your holiday debt hangover to continue until the following Christmas!
Track your progress
Review your progress monthly to discover 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 practical depending on the past month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to celebrate your achievement. 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 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. Rather than 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 depending on your individual circumstances. For a confidential discussion on how to properly manage your debts, call Bankruptcy Darwin on 1300 818 575 or visit http://www.bankruptcy-darwin.com.au/