Dont Bring Your Debt Struggles Into The New Year
2017-01-25 minute read
The presents have all been opened, the many holiday feasts consumed, the tree has been packed away and you have many magical holiday memories. So, what’s the problem? Unfortunately, more gifts are yet to arrive in the mail - your dreaded credit card bill(s).
The bad news is, there is not much you can do to take the sting out of holiday debt, unless you were to return all the gifts! There is however, some good news: You have the power to tackle your debts and gain some control over them quickly. Here are a few suggestions:
- Employ the snowball method.
One of the methods for debt repayment is the snowball method. Here, you undertake to make minimum payments on all your debts. Starting with the one with the smallest balance, pay it off as quickly as you can by diverting all available funds to it. Once it has been paid off, you will set your sights on the next smallest debt until it too is also paid off. Then, simply continue repeating this process. When it comes to the largest debt, you will attack it viciously by throwing all the money available in your budget at it until it is gone.
- Employ the avalanche method.
The other method for debt repayment is the avalanche method. Here, you also undertake to make minimum payments on all your debts, as in the snowball method. However, you will focus on paying off the debt with the highest interest rate first, before moving onto debts with lower interest rates. This method will ultimately save you more money, however, it might not work for some as they might get discouraged with the apparent lack of progress, especially if the debt with the highest interest rate is also the debt with the largest outstanding balance.
- Strip your budget to the bare bones.
Of course, it will be a lot easier with find extra money in your budget if you’re able to cut down on your monthly spending. For some, that might mean eating at home more often or staying away from purchases at malls or online stores. But for others, it might mean modifying or cancelling your cable TV subscription or other monthly expenses, until your debts are paid off. Either way, stripping your budget to the bones should free up some extra money that you can put towards your holiday debt.
- Sell anything and everything.
Selling items is another great way to help get out of holiday debt. You can sell anything and everything you don’t want or need. Start by going through your house and identifying items that are unused. Then post them on Craigslist, Kijiji or another retail website you feel comfortable using. Consider selling presents you received but don’t want, old tools and electronics and / or toys your kids have outgrown. With the proceeds, you can put them straight towards your holiday debt.
You cannot change the fact that you charged your holiday purchases, but you are in control of how long it takes to pay them off. If you want to get out of debt and stay out of debt, the most important first step is create a plan and follow through to make it happen.
If none of these options work with you, consider a free consultation with MNP Ltd. We can discuss these strategies in further detail while also providing you with other routes that may work for you. Together we will find a solution. Don’t put off peace of mind – Act Today!
