|March 22, 2017||0|
For the majority of people, Christmas is seen as the most joyful time of year for both young and old. Most of us are ecstatic 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 crucial for our mental health, so it’s easy to overindulge in presents and vacations during the festive season. But alas, the new year arrives soon enough and we can all start afresh. Time to make some resolutions and plan out the year in advance.
Before we recognise it, we’re back in the same schedule. Work, school, bills, stress. But what if you’re in the position where you spent far too much in the course of the festive season and now you’re in debt? Well, don’t be paniced, it happens to many people during this time of year. Luckily we’ve got some recommendations on how you can successfully 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 determine how much you owe. Find a pen and paper and list all the debts you have, alongside 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. Once you’ve determined your repayment amounts, you’ll have to work out a plan on paying off the principal, which brings us to our next tip.
Always remember that debts are composed of both interest repayments and principals. Paying the interest only will doing nothing long-term, so after 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 to begin with which will save you money in the long run. Interest on loans are a formidable force and can maim your finances if you don’t take care. You also might wish 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 that you can continue to enjoy the year in advance, you’ll need to repay your Christmas debt within the first quarter of the year, so establishing a budget and following it is essential. If you’ve had difficulty adhering to a budget before, there are a number of great smartphone apps that can help you with managing your budget. Just because you’re on a budget doesn’t signify you can’t have any fun either. There are a number of free and low-priced activities available, you just have to adjust 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 refrain from unnecessary expenses. You might choose to stop eating out 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 have to do to save money – being frugal is critical. Get in control of your expenses and save as much as possible; you don’t want your holiday debt hangover to continue until next Christmas!
Monitor your progress
Review your progress each month to discover 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 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 need 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 tracking 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. 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 appropriately manage your debts, call Fresh Start Solutions Gold Coast on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-goldcoast