The holidays are such a magical time, and gift-giving can be more fun and rewarding than receiving. Let’s look at how you can deal with any debt you may have incurred while buying all of those presents.
Assess Your Overall Financial Situation
Before you do anything else, look at your entire financial situation. Start with your income, then look at your regular monthly expenses and then any extra debt you gained over the holidays. Make lists, make note of deadlines, interest rates and create goals to help get you started. Once you have the big picture in front of you, you can create a plan to tackle holiday debt. You can also start planning now for how to save for the next holiday season!
Decide on a Payment Strategy
Ideally you want to pay off credit cards or accounts with the highest interest rates first. If you have more than one credit card, you could also pay off the one(s) with smaller balances first. Having small victories and seeing a $0 balance will help along your debt journey. The two most important things in reducing debt are paying more than the minimum due and making payments on time.
Stop Thoughtless Spending
The new year is a great time to cut out unnecessary spending. Pack your lunch, use reusable water bottles, do your own nails, and cook dinner at home more often. You can also clip coupons and take advantage of special offers or free activities while you pay off your holiday debt.
Budget Smart All Year
Once you get caught up from holiday spending, start making a budget for the year, including the holidays. You can even open a Holiday Club savings account at Kansas City Credit Union. If you use payroll deduction, money is automatically added to the account; then, on October 15th, you can withdraw the money and use it for holiday or other expenses. Make a plan to save, shop early, and stick to a budget so you won’t have to worry about holiday debt!