Combating post-holiday financial woes
The new year has come, the decorations have been taken down, and the holiday season is officially behind us. Unfortunately, the holiday debt that many of us have accumulated over the holiday season has followed us into the new year. Here are some helpful tips to help get your head back over the water and out of holiday debt.
Pay off credit cards asap
Your biggest priority is to get any credit cards you used over the holidays paid off as soon as possible. It is imperative that you stay on top of payments and prevent yourself from sinking even further into debt. It is important to make your payments on time and in full, as failing to do so can have major repercussions on your credit score. After 30 days of non-payment your credit card company can report the activity to the credit bureaus, which will have a negative impact on your credit score, and in turn cause you problems down the road.
Consolidate debt if possible
If you accumulated debt in various forms over the holidays, it may be worth your while to consolidate. Consolidating will lump your forms of debt into one payment, reducing the amount of interest you have to pay, saving you money in the long run. And, because you are paying less interest, you will be paying off more of the principal loan, helping you pay down your debt quicker. On top of these benefits, you also gain the convenience of having to only make one monthly payment, rather than multiple payments to different lenders.
Budget and spend less in the New Year
Unfortunately, debt to pay off in a timely manner means you’ll have to cut back on some things for a while. It is in your best interest to set a realistic budget to ensure you can make the payments you need to. Thankfully there are many smartphone apps out there that can help you set a budget and track your spending. This may mean that for a while you have to cut back on things like dinners out, or those new pair of shoes you want, but you need to make sure your priorities are straight until your holiday debt is paid off.
Start saving for next year’s holiday season
Being able to budget your money is a good habit to keep up throughout the year, this way you are able to save throughout the year so you do not have to use as much credit come the holiday season. It is important to set a budget that is realistic to you and your lifestyle. Create a budget that allows you to put money aside over the year, but gives you enough wiggle room to enjoy that which gives you joy in life. Saving throughout the year will not only leave you with a holiday nest egg come the end of the year, but it will help ensure that you have money set aside for emergencies. The new year is a great time to start fresh with your finances, and embody the saying “new year, new me”. Here are some tips to help you save in 2018, making it a more financially sound year than those previous.