|March 22, 2017||0|
For many people, Christmas is seen as the most pleasant time of year for both young and old. We all are inspired to finalise the year of work or school and devote 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 rather easy to lose track of your savings and your waistline! Enjoying a hard-earned break is essential for our mental health, so it’s easy to overindulge in gifts and getaways 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 routine. Work, school, bills, stress. But what if you’re in the position where you spent a bit too much during the festive season and now you’re in debt? Well, don’t be alarmed, it happens to numerous people during this time of year. Luckily we’ve got some tips on how you can effectively clear your Christmas debts in a timely fashion.
Produce a list of your debts
The first step in repaying your Christmas debts is to understand how much you owe. Grab a pen and paper and list all of 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. After 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 suggestion.
Remember that debts are composed of 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 make 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 in the long run. Interest on loans are a powerful force and can maim your finances if you don’t take care. You likewise might want to list your income streams also so you can work out 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 really want to settle your Christmas debt within the first quarter of the year, so coming up with a budget and sticking to it is essential. If you’ve had problems adhering to a budget in the past, there are a lot of great smartphone apps that can assist you with managing your budget. Just because you’re on a budget doesn’t suggest you can’t have any fun either. There are a number of free and low-cost activities available, you just need to change 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 increase your savings and steer 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 gas. If you feel inclined, cut up your credit cards! Do whatever you need to do to save money – being prudent is imperative. 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
Review your progress monthly to discover how well your plan is performing. You might need to make some changes if required, 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 celebrate your success. A reward doesn’t need to cost an exorbitant amount of money, but it will improve your motivation to stick to your plan in times of need. By budgeting and monitoring your development, 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 honestly 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 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 according to your individual circumstances. For a confidential discussion on how to efficiently manage your debts, call Fresh Start Solutions Sydney on 1300 818 575 or visit http://freshstartsolutions.com.au/bankruptcy-sydney