Before the holidays there was endless advice about setting a budget and sticking to a shopping list. Those who ignored the wisdom shared by experts will be in for a shock when credit card and bank statements arrive in the mail.
According to a Consumer Reports poll, six percent of us are still paying off holiday debts from 2010. That means any new purchases racked up over the past holiday season will inflate those interest charges and make paying down the old and new balances more difficult and expensive.
If the bottom line on your bills is looking ugly, it's time to get a financial-management makeover. Consider these tips for balancing your holiday debt:
1. Double and Triple Up
Multiply your credit card minimum payments two or three times to reduce
the amount of interest you'll end up paying. Merely meeting the minimum
means you'll
never see bottom.
2. Now's the Time to Negotiate
Talk to your credit card company about negotiating a better rate on
interest, fees and other expenses. If your interest rate is above 15
percent and they
won't negotiate, it may be time to transfer much of the balance to a
lower-cost card. Just make sure you pay off the debt before the interest
rate climbs
again.
3. Go On a No-spend Diet
Stick those credit cards in the freezer, if you have to, but do what it
takes to avoid impulse shopping sprees. Better yet, give them to a
trusted friend
or family member for safekeeping.
4. Get Couponing
Using coupons for necessary purchases not only saves you money, but the
practice helps you make more educated purchasing decisions. You can find
online and printable
coupons for thousands of stores on CouponSherpa.com, or download their
mobile app for instant access to coupons while you shop.
5. Stick to Cash
There's something about parting with greenbacks that makes us less
likely to spend. Keep a budgeted amount on hand and stay away from the
cards. Using the
envelope system is expecially helpful in tracking your cash spending while working
toward financial goals.
6. Cut Back on Luxuries
You've had your fun during the holidays; now it's time to get serious.
Cut out the restaurants, nail salon and triple shot mocha latte until
the bills are under
control. Of course, too strict of an economic diet is as easy to break
as a weight-loss regimen. So figure in an occasional, small splurge to
keep you going.
7. Set Small Goals
Don't try to do everything at once. If paying off credit cards in three
months means going hungry, you're biting off more than you can chew. Set
smaller, obtainable
goals and you'll appreciate the final results more. For those with
multiple credit cards with high balances, try paying down one card at a
time to feel that sense of
accomplishment needed to push on to the next goal.
8. Meet With a Financial Planner
If you're barely treading financial water, it's time to get some
assistance. A professional financial planner can help you establish a
reasonable plan that
won't leave you paying off debts until next Christmas. You can find a
qualified guide through the
Certified Financial Planner Board of Standards website or you might check for non-profit assistance.
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Andrea Woroch is a consumer and money-saving expert who has been featured among top news outlets such as Good Morning America, NBC's Today, MSNBC, New York Times, Kiplinger Personal Finance, CNNMoney and many more. She is available for in-studio, satellite or skype interviews and to write guest posts or articles.
For all media inquiries, please contact Andrea Woroch at 970-672-6085 or email andrea@kinoliinc.com.
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