Along with oodles of good cheer the holiday season always brings with it a feverish pull to spend. Everywhere there are advertisements showcasing the newest gadgets and the trendiest in home décor. It can take a steely reserve to avoid overspending and getting into debt. This is why the months following the holiday season are notoriously dedicated to post holiday debt reduction strategies. The following tips can help you to get your finances back on track and rid yourself of your heavy debt burden as soon as possible.
Get an Honest Assessment of Your Debt Situation
The first step to getting out of debt is to be honest about how much debt you actually have. There is no point hiding those credit card statements and putting off opening your department store bills. The sooner you face up to your debt, the sooner you can take steps to get it under control. Make a list of all the money you owe and place them in order of the highest interest rate first. It helps to detail the balance outstanding, the interest rate and the payment deadline.
Have an Urgent Household Budget Review
When you know how much you have to repay you can take another look at your family budget. The aim is to find areas that you can cut back on to create some room for paying off debt. For instance, you may have to sacrifice your cable viewing or gym membership to make way for making additional payments on your credit card balance.
Start Funneling Money into High Interest Debt
When you have a list of your debt obligations starting with the highest interest first, you can then start to place lump sums into the top amount. The idea is to continue making the minimum payments on all your accounts but to dedicate all extra funds to the balance with the highest interest rate first. When this is paid off in full you can move down to the next balance on the list.
Get Your Returns Out of the Way
When the festivities have passed you might start to look at your purchases with new eyes. There may be some items that you bought on a whim that you would like to return. This can also help to bring in some extra cash that can then be put towards paying down your debt.
Keep Spending Under Control
It is important to remember not to continue to spend while you are trying to get out of debt. The logic behind this piece of advice may be obvious but it is not so easy to put into practice. If you find it hard to stop impulse spending try leaving your credit cards at home until they are paid off and only walk with small amounts of cash.
The aftermath of the holiday season can leave your finances in shambles, but the tips above can help to alleviate the damage. It also helps to remember that the holidays will come around again, so saving ahead of time can prevent a repeat of your post-holiday financial blues.