For the majority of people, Christmas is considered the most jubilant time of year for both young and old. Most of us are thrilled to finish the year of work or school and spend 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 incredibly easy to lose track of your savings and your waistline! Taking a hard-earned break is fundamental for our emotional health, so it’s easy to overindulge in presents and family holidays during the festive season. But alas, the new year comes around soon enough and we can all start anew. Time to make some resolutions and prepare for the year ahead.
Before we recognise it, we’re back in the same habits. Work, school, bills, stress. But what if you’re in the scenario where you spent excessively in the course of the festive season and now you’re in debt? Well, don’t be spooked, it happens to plenty of people during this time of year. The good news is we’ve got some techniques on how you can proficiently repay your Christmas debts in a timely fashion.
Create a list of your debts
The very first step in clearing your Christmas debts is to find out how much you owe. Find a pen and paper and list all the debts you have, in addition to the creditor’s, interest rates, next repayment date and repayment amounts. Aim to be conservative here and list every debt you have, irrespective of how big or small. After you’ve discovered your repayment amounts, you’ll have to devise a plan on paying off the principal, which leads us to our next suggestion.
Remember that debts includes both interest repayments and principals. Paying the interest only will doing nothing long-term, so once you’ve figured out your repayment amounts, the next step is to devise a plan on paying off the principal. It’s always best to concentrate on the highest interest rate debts to begin with which will save you money in the future. Interest on loans are a powerful force and can debilitate your finances if you don’t take care. You likewise may want to list your income streams simultaneously 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 that you can continue to enjoy the year in advance, you’ll really want to clear your Christmas debt within the first quarter of the year, so putting together a budget and sticking to it is imperative. If you’ve had difficulty sticking to a budget before, there are lots 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 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
Whilst it may sound obvious, the quickest way to pay off debt is to increase your savings and steer clear of unnecessary expenses. You might like to stop eating 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 gas. If you feel inclined, cut up your credit cards! Do whatever you need to do to save money – being prudent is vital. Get in control of your expenditures and save as much as possible; you don’t want your holiday debt hangover to last until next Christmas!
Track your progress
Assess your progress monthly to see how well your plan is performing. You might need to make some changes if needed, and you’ll have a better idea of what changes are reasonable based on 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 have to cost an outrageous amount of money, but it will raise 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 been successful, you may be experiencing financial hardship. Rather than waiting and paying more and more 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 efficiently manage your debts, call Bankruptcy Melbourne on 1300 879 867 or visit www.bankruptcymelbourne.com