Did you overdo it this holiday season? Have you gone way over budget, leaving yourself with a humongous bill? Are you wondering how you’ll be able to make next month’s rent because of all the cash you dropped over the holidays?
Fortunately, your debt can be paid off within a reasonable time frame, especially if you’re willing to get highly organized and start spending frugally. Here are 5 essential tips to help you pay off your holiday debt quickly:
Create a Holiday Debt Agenda & Schedule
For paying off major debts, it’s best to create a strict pay-off off schedule. Don’t just think about how you’re going to pay off your debt, but come up with a comprehensive plan and actually write it down. Figure out what size minimum payment you can afford each month and set up a schedule of automatic electronic payments so that it gets sent out as soon as you receive each paycheck. You can always increase your monthly payment if your funds will allow, but whatever you do don’t miss a monthly payment, as the last thing you want is your interest charges to dramatically increase due to missing a payment.
Be Realistic in How You Pay it Off
Your next paycheck may be just days away, but don’t use it all to pay off your holiday debt unless you don’t need that money for anything else. Although you’ll want to pay off the debt as soon as possible to avoid interest charges, be realistic when determining much you can reasonably afford to pay at each installment. Factor in your monthly expenditures to see just how much you can spare, and don’t over-do it or you could find yourself needing to borrow even more money from other sources. The last thing you want to do is put yourself in a situation where you’ll need to take out a cash title loan on your car.
Cut Back on Your Other Expenditures
Make sure that you cut back on expenses wherever possible to make budgeting room for additional debt repayments. Do you really use your monthly gym membership? Or that monthly online subscription service? Look at your monthly expenditures and cut back on any unnecessary spending. Don’t eat out at expensive restaurants, don’t buy new clothes and don’t go on vacation until you’ve escaped from debt completely! It may be tough to make these kinds of sacrifices in order to pay off your holiday debt in a timely manner, but in the end it will be worth it.
Dip into Your Savings
If cutting back and following a repayment schedule simply aren’t cutting it, you may want to dip into your savings in order to pay off your debt. Have you been stashing money for a rainy day, a fancy trip to Europe, or to buy something special for your significant other? You might hate to do it, but dipping into these savings could prevent you from facing serious interest charges, saving you a great deal of money in the long run. Remember that compound interest works both ways, and that the longer you take the pay back your debt, the more you’ll end up spending on it in the process. You can always rebuild your savings later on, but getting out of your existing debt should ultimately be your top priority.
Borrow Money from Friends & Family
If all else fails, you may want to consider borrowing money. Avoid getting ripped off by a payday loan center by asking your friends or family members if they can help you out. Explain the financial situation you’re in, and you may be surprised at just how generous they can be. You may be able to borrow all the money you need to rid yourself of holiday debt! Of course, your friends and family might say no, but asking is worth a try!
Paying off your holiday debt is possible if you’re willing to be diligent and thrifty. Keep your eyes on the ultimate prize of being holiday debt free and you should be able to get it done in no time.