Now that the holidays have come and (quickly) gone, many of us are bracing for the bills to come after splurging a bit too much on presents, decorations and food. In fact, in a poll recently performed by Yahoo, almost 70% of respondents said that they used credit cards to pay for practically all of their Christmas shopping in 2014.
If one of those people was you, today’s blog will give you 5 ways to pay down that holiday debt as quickly as possible. Enjoy.
1) First, you’ve got to figure out how much money you actually have at the end of the month to use towards paying down your holiday debt. That involves figuring out what your fixed expenses are and, once you’ve done that, also figuring out what your flexible expenses are as well. Once you’ve got them all tallied, subtract that number from what you make every month. Anything left over should be used to pay your credit card bills. (If you already have a working budget, this will be much easier.)
2) Once you know exactly what’s coming in and going out every month, you can then cut back on unnecessary expenses like entertainment, new clothing and entertaining, among other things. Let’s face it, then debt isn’t going to pay itself and, until it’s paid off, you’ll be losing money in interest. If you can hunker down for a few months you’ll not only pay it off quicker but, by the time spring and summer roll around, you might actually have a little bit of money left over at the end of the week / month to have some fun. (Just remember to save some of that money too.)
3) Since it’s winter and outdoor activities are limited, now might be a great time to use any skills you have to work part time and make some extra money, and then use that money to pay down your holiday debt. Interestingly, January just happens to be a great month to find a job so, if you’re unhappy with the one you have now, you might consider looking for a newer, better one that pays a little bit more.
4) Now is a great time to use a bit of strategy also. If you used more than one credit card to make your holiday purchases, paying off the card with the highest interest rate first, by the using as much money as possible and paying the minimums on the others, is a great idea. Once that card is paid, shift to the next card with the next highest interest rate and do the same thing. Do that until all of them are paid and you’ll have paid much less in interest.
5) Finally, bring someone on board with your debt paying plans. It’s always easier to do something if you do it with a partner or in a group, so let people know that you plan to pay off your debt quickly and give them an idea of what your goals are. Keep them updated and let them know that, if you don’t meet your goals, they can give you a hard time. If they’re good friends they will and you’ll get your debt paid off more quickly.