It’s that time of year when a lot of us need to get rid of Holiday Debt. We went a little overboard over the holiday season as we wanted to please all our loved ones with the perfect gift or wanted to put on the best holiday soiree. Some of us accomplished this while others of us died not but either way we tried. To accomplish what we thought would be the best holiday we pulled out the credit cards and slammed every charge on them. Now it is time to pick up the pieces and pay up while still maintaining our regular bills. And now we cry – Oh we want to get out of debt!
You know you have to take care of the debt without taking too much time to do so or your interest payments will have you paying for the debt for the rest of the year. This leaves you with debt all year which clears up just around holiday time and then the cycle begins all over again. Here we want to provide you with some tips to get rid of holiday debt and help you not fall into debt again next holiday.
Get Rid of Holiday Debt by Cutting Back on Spending in January and February
The holiday season is freshly over and you have a number of gifts, gift cards and food left over. The bills aren’t due just yet and the interest charges have not started to make your efforts seem dismal. Why not use some of the excess you have to help you while you cut back on spending in January and keep spending at the bare minimum for February. Sacrifice on some of the things that are not necessary for the first couple months before the interest charges start kicking in and making your minimum payment appear to do nothing to your balance. What are you going to do with the money you save in these months by only getting the minimum necessities? Send it straight to that credit card – don’t even wait until your due date. You want to preferably send the extra payments to the credit card with the highest interest rates.
- Take out all your credit card bills
- Look for the one with the highest interest rate
- Put your extra money saved onto the credit card with the highest interest rate
- Always pay more than the minimum balance wherever and whenever possible
Get Rid of Holiday Debt with a Balance Transfer Offer
Now is a good time to look out for credit card balance transfer offers that alloy you the opportunity to pay 0% interest on your balance for a particular period if you transfer your balance. Even with this type of credit card you should still make extra payments whenever possible.
Get Rid of Holiday Debt by Selling Unwanted Items
Some of those gifts you got that you will never use and never wear – you can sell them and use the income to put toward your debt. No need to have them at home gathering dust and taking up space. If there are old things that you have replaced with new gift items you can sell the old things as well. You could do a yard sale or list them online on websites such as eBay, Craigslist etc.
Stay out of Debt Next Holiday
Not only should you aim for getting rid of holiday debt now but you should also start taking steps to stay out of debt after the next holiday season. Do this by beginning a savings plan. You can save small amounts each week and by next Holiday you should have a sizeable amount. With savings of just $10 per week you can have over $500 dollars to spend on holiday expenses when the time comes around. If you can afford to save more just imagine how much money you could have available to ensure that you don’t get into debt this December.
In addition to saving up for next holiday we also need to be more realistic with our holiday spending plans and budgets so that next year we will not have to worry about how to get rid of holiday debt again.
- Minimize travelling
- Minimize elaborate gift giving
- Move holiday celebrations to a venue that is more central to all parties involved
- Start buying gifts in advance, a little at a time
- Give gifts that don’t cost money
- Decline invitations tastefully
[Read: Save Money On Holiday Shopping!]
Remember that the holiday is not just about the gifts. It is about the warmth of togetherness and loving others. Celebrating the season in a meaningful way should not leave you in debt for the New Year. Maybe refocus your priorities for the season and do meaningful things for those around you without swiping your credit card at every POS you pass. Remember you don’t have to give the most expensive gift or throw the fanciest holiday dinner to show you care.