|March 22, 2017||0|
For most people, Christmas is considered the most jubilant time of year for both young and old. We all 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 rather easy to lose track of your savings and your waistline! Enjoying a hard-earned holiday is essential for our emotional health, so it’s easy to overindulge in gifts and vacations 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 plan for the year ahead.
Before we recognise it, we’re back in the same schedule. Work, school, bills, stress. But what if you’re in the predicament where you spent excessively in the course of the festive season and now you’re in debt? Well, don’t be startled, it happens to numerous people during this time of year. The good news is we’ve got some ideas on how you can successfully repay your Christmas debts in a timely fashion.
Produce a list of your debts
The first step in clearing your Christmas debts is to evaluate how much you owe. Get a pen and paper and list each of the debts you have, along 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. After you’ve discovered your repayment amounts, you’ll have to devise a plan on paying off the principal, which brings us to our next tip.
Keep in mind that debts are composed of both interest repayments and principals. Paying the interest only will doing nothing long-term, so when you’ve determined your repayment amounts, the next step is to make a plan on paying off the principal. It’s always best to focus on the highest interest rate debts first 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 additionally may want to list your income streams as well 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 ahead, you’ll want to clear your Christmas debt inside the first quarter of the year, so putting together a budget and sticking to it is vital. If you’ve had difficulty sticking to a budget in the past, there are a number of great smartphone apps that can support you with sustaining your budget. Just because you’re on a budget doesn’t mean you can’t have any fun either. There are a lot 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 quickest way to pay off debt is to grow your savings and steer clear of unnecessary expenses. You might like to stop eating out 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, chop up your credit cards! Do whatever you have to do to save money – being penny-wise is essential. Get in control of your expenses 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 progress monthly 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 practical based on the previous month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to commemorate your success. A reward doesn’t need to cost an extravagant amount of money, but it will enhance your motivation to stick to your plan in times of need. By budgeting and monitoring 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 genuinely 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 a growing 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 according to your individual circumstances. For a confidential discussion on how to appropriately manage your debts, call Fresh Start Solutions Hobart on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-hobart