|March 22, 2017||16|
For most people, Christmas is considered the most joyous time of year for both young and old. All of us are thrilled to wind up 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 remarkably easy to lose track of your savings and your waistline! Taking a hard-earned break is fundamental 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 anew. Time to make some resolutions and plan for the year ahead.
Before we know it, we’re back in the same habits. 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 paniced, it happens to numerous people during this time of year. Fortunately we’ve got some techniques on how you can efficiently repay your Christmas debts in a timely fashion.
Make a list of your debts
The first step in clearing your Christmas debts is to work out how much you owe. Get hold of a pen and paper and list all of the debts you have, in conjunction with the creditor’s, interest rates, next repayment date and repayment amounts. Aim to be conservative here and list every single debt you have, regardless of how big or small. Once you’ve discovered your repayment amounts, you’ll need to work out a plan on paying off the principal, which brings us to our next recommendation.
Keep in mind that debts comprise of both interest repayments and principals. Paying the interest only will doing nothing long-term, so after you’ve figured out your repayment amounts, the next step is to devise a plan on paying off the principal. It’s generally best to concentrate 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 maim your finances if you don’t take care. You likewise might wish to list your income streams as well 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 ensure that you can continue to enjoy the year in advance, you’ll need to settle your Christmas debt inside the first quarter of the year, so establishing a budget and sticking to it is essential. If you’ve had difficulty following a budget before, 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 affordable activities available, you just have to change your perspective and don’t let your Christmas debt take control of your life.
Save, save, save
Even though it may sound obvious, the quickest way to pay off debt is to grow your savings and refrain from unnecessary expenses. You might need to stop eating in restaurants once a week which can save you a surprising amount of money. Or you might catch public transport to work to save money on fuel. If you feel inclined, chop up your credit cards! Do whatever you need to do to save money – being frugal is critical. Get in control of your expenditures and save as much as possible; you don’t want your holiday debt hangover to continue until the following Christmas!
Monitor your progress
Assess your progression every month to see how well your plan is performing. You might prefer to make some changes if required, and you’ll have a better idea of what changes are realistic depending on the previous 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 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 genuinely 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 according to your individual circumstances. For a confidential discussion on how to properly manage your debts, call Fresh Start Solutions on 1300 818 575 or visit https://freshstartsolutions.com.au