Battling Holiday Debt
Just with the Christmas and New Year celebrations went, we are here struggling with the holiday debt that we have had during the holiday season with our "not-so-careful-spending". It's quite a thing to see how holiday spending adds up - and so does the holiday debt.
It's important and rather essential to pay the debt as soon as possible - because the longer you take, the harder it will get to pay. The debt tends to accumulate over time, giving you more frequent episodes of anxiety and depression about how you are actually going to pay it off. This article will discuss some of the best ways to help you pay the credit promptly.
But before we move to pay off the debt, we should consider how we can prevent it from stacking up in the first place. Here are a few tips to avoid overspending during the holiday season:
Create a holiday shopping budget
Creating a holiday shopping budget can be challenging, but it will give you a seamless holiday experience if you stick to it. Look carefully in your account, calculate your savings, and then make different categories about gifts and other stuff. Now allocate the right amount into each category.
Use Credit Cards more often.
During the holiday season, credit cards offer many rewards or cashback. Hence, it is a good idea to use your credit cards for shopping. Even if you do not get the reward, trying won't hurt. Or would it?
Avoid unnecessary self-purchases
While you shop for friends and family, it's not necessary that you shop for yourself too. You can wait for some time. You should prioritize each task and spend on it accordingly.
Making the right strategy about what you should buy and when is going to save you from a lot of trouble. You can put things on hold that are not required right at the moment and can move for stuff that needs immediate monetary assistance.
Use your receipts to get refunds.
Keeping your receipts is a good and disciplined way of shopping. It can prevent you from a lot of problems after the holiday season has gone. If you purchase something and its price drops sometime later, you can take the receipt to the retailer and get the difference back.
If due to some unfortunate circumstances, you have overspent during your holiday - and now struggling to pay it, we have a few tips for you.
How to Pay-off Holiday Debt?
There are certain ways that people use to pay off their holiday debt. It might include making a single hefty payment to minimize the interest rate - or alternatively, go for an interest-free payment plan.
Pay the debt off as soon as possible.
Paying off the debt earlier not only saves you from the stress of it - but also saves a huge amount of money that you will have to give in the form of interest. You can put your personal expenses on hold for a while and pay off as much as you can every month.
Ultimately, you will be able to give off all the debt and will be free and relaxed for the rest of the year. However, if it continues to pile up, you will have to bear the stress of it - for god knows how long!
Balance Transfer Card
If you don't have a balance transfer card, consider applying for one. Balance transfer cards allow you to shift to a zero-interest balance transfer card. In this way, you won't have to pay the interest as it gets to accumulate.
Alter your Lifestyle for a while
Debts are super stressful - and it's better to take them off as soon as you can, even if it involves giving up on your expensive habits. Some luxuries are not necessary, and it's okay to give up on them for some time. Consider making the following simple changes at your home and in your lifestyle:
- Cut off your cable expenses for a while
- Limit the meals you buy from restaurants and considering cooking at home
- Drive less to save more on fuel
- Give up on unnecessary stuff in your grocery
- Postpone your vacation plans until you pay off your debt
Choose the suitable payment methods
Choosing has to be done from the two methods that the finance experts swear by - the snowball method and the avalanche method. As the name indicates, you are going to pay off the smallest debt first in the snowball method. This will give you a boost to pay for the larger ones - even if it includes sacrificing some of the luxury habits.
On the other hand, the avalanche method emphasizes making small payments on all debts and using the leftover money to pay the high-interest debt. This is an effective method to save you a lot of money that will go as interest otherwise.
Apply for a loan
It might sound absurd in the beginning, but if you take a loan with a lower interest rate to pay off debt with a higher interest rate - it's certainly not a bad idea.
You can apply for a debt consolidation loan with the lowest interest rate. After the approval, make sure that you pay off the loan first - rather than putting money in your credit cards or using them for unnecessary activities.
Use financial planning apps
Although many people are a bit wary of financial planning apps, they make life much more simple and keep you motivated towards your goal. These apps can help you control your expenses and save a sufficient amount of money to pull you off your holiday debt or prevent you from falling into one.
All of us have battled the holiday season debt once in a while. At the same time, some of us battle it every year due to our uncareful planning and overspending. The best bet is to avoid the debt to as much extent as possible. Repaying can hurt - and if you have to repay with interest, it hurts super bad. So, the tips mentioned above and ideas can help you avoid the debt as much as possible and pay it off quickly and effectively!
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