There’s nothing like the Christmas holidays to have you whipping out your wallet even when you can’t afford it. And that’s totally understandable: you want to buy things for your friends and family to show your love and appreciation. But this material show of love and affection can wreak havoc on your finances, and put you in significant financial trouble. If you’re in trouble of this sort, and need some help getting out of debt and back into the black, read on. Here are 4 tips for paying off your credit card debts after the intoxicating Christmas spirit has washed away, and you’re left with credit card bills up to your ears!
1. Determine the amount you can pay.
One of the first things you should focus on is your current state of finances. Sit down and do the math. How much do you make after taxes? How much are your monthly bills? How much do you need for food, clothing and necessities each month? Answer all of these questions first. If you don’t know how much you currently spend each month, then keep track of those receipts, and carry a spending diary with you as you go about your day. Over time, you will have the hard data you need to have an accurate picture of your current financial standing. It is only once this is known that you can then determine how much you can realistically put aside each month for your debt.
2. Use a debt consolidator.
You’ve probably heard of the snowball effect. Unfortunately, many people have multiple credit cards that they use, and each comes with their own interest rates and payment terms. If you’re one of these people, and owe money on multiple cards, it helps to use the services of a debt consolidator like Fox Symes. Debt consolidators will combine all your different interest payments into one, allowing you to better plan your debt pay-off strategy. Head on over to the Fox Symes Blog for ideas on just how this works if you have any questions.
3. Avoid blind spending.
For a lot of people, blind spending is how they got into credit card debt in the first place. It’s so easy to lose track of how much you’re actually spending each month, and how much you can actually afford. It helps to make a record of everything you spend, for example, in a spending diary. The very fact that you’ll need to keep track of your spending can make you feel accountable for your spending, and this may prevent you from making those unnecessary purchases. Better yet, cut up your credit card so that you don’t add any more fuel to the fire. Yes, this last tip is an extreme option indeed, but perhaps necessary if you lack self-restraint.
4. Sell your things.
Many people are reluctant to do this, but quite often this is one of the best decisions you can make. Not only will it help you pay off your debt and remove that burden from your shoulders, but it will also clear up your home. We really don’t need half the things we have in our homes, and getting into debt – and then selling this stuff – can be a blessing in disguise.
Credit card debt can be overwhelming. But don’t let it get the best of you. By following the above 4 tips, and exercising a little self-restraint, you can be out of debt and back into a healthy financial position sooner than you think.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.