How to Recover From Holiday Spending

While many people consider the holidays the best time of the year, they’re undeniably also the most expensive. Between the costs associated with hosting and attending holiday parties, buying gifts, purchasing items to decorate your home, and all the other expenses, many people start the New Year in a not-so-stellar financial state.

If this sounds familiar, don’t stress. There are many quick and easy ways to pay off your holiday credit card debt and replenish your savings account in no time at all. Follow these 7 tips to pay off holiday debt and regain control of your finances.

Return Unused and Unwanted Gifts

Let’s face it everyone gets holiday gifts they don’t actually want. Instead of letting these items collect dust in your home, return them to the store to get a little extra money. Even if you don’t have the receipt, most stores will give you merchandise credit, which you can certainly put to good use. The same rule applies to unused gifts. If you bought gifts for people and never actually gave them out, return the items to the store, get a refund and put the extra money towards paying off your credit card debt.

Create a Budget

You have to be in control of your finances to create a strategy to pay debt off. Write down and calculate all your necessary monthly expenditures, such as rent or mortgage payments, transportation costs, and utility expenses. Then add up your total amount of debt. Use this total to make a budget that’ll help you pay off debt and avoid accruing even more.

Transfer Balances to One Credit Card

While not always the best move, consolidating your credit card balances onto one card can save you a great deal of money. Before making the move, compare interest rates, see if there’s a fee to complete the transfers, check the terms of each card and consider your credit limits on each card. If you’re able to find a credit card with a lower interest rate and attractive terms and conditions, not only can this save you money, it can also help to raise your credit score.

Use Your Tax Refund to Pay Off Debt

Everyone loves getting the extra springtime “tax bonus” each year. Instead of spending yours freely, dedicate the full refund to paying off your holiday debt. While it might be tempting to spend the funds on a new bag or a vacation, think of how good you’ll feel by getting closer to being debt-free.

Cut Back on Expenses

Save extra money by cutting back on non-essential spending. For example, if you typically eat out most days of the week, start bringing your lunch to work and stay in for dinner all but a couple nights per week. Or if you’re a bit of a shopaholic, vow to stop buying new clothes until you’ve paid your holiday debt off.

Save Cash Gifts  

If you received monetary gifts this holiday season, you’re probably filled with ideas of how you’d like to spend the funds. While you’re probably not going to want to hear this, saving that money and putting it toward the debt you incurred during the holiday season is the most financially savvy thing to do. The longer you let balances sit on your credit cards, the more interest you’ll incur, making your debt even greater. So use the money to bring your debt levels down and then save up to reward yourself for your sacrifices in a few months.

Earn Extra Income

If your job offers overtime pay for working extra hours, put in a little more time at the office to earn additional income. Getting a temporary part-time job is another great way to supplement your regular income and get those debts paid off fast.

See a Financial Counselor

It’s never easy to ask for help, especially when it comes to your money. But seeing a financial counselor, who can help teach you how to budget and get yourself out of debt, can make a world of difference.

Final Word

The holidays are a pricey time of year. We are all susceptible to getting carried away with expenses, as we want to give our loved ones the world. If you’re feeling overwhelmed with debt, don’t worry! With a little savvy planning and a bit of financial sacrifice, you’ll be back on your feet in no time at all.

Damaris Olaechea, NerdWallet

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Manage Student Loans to Avoid Trouble

One of five U.S. households has student-loan debt, with the biggest burden falling on the young and poor, according to USAToday.com. The economic downturn adds to debt among recent college grads, who often don’t find full-time jobs after graduation. The lack of a consistent paycheck goes hand in hand with the inability to pay back loans.

Follow this advice from Credit Abuse Resistance Education, Alexandria, Va., to help manage student loans:

Know loan details. Know how much you owe on all student loans, as well as the interest rates, monthly payments, and when the loans need to be paid off.

Stay in touch with your lender. Let your lender know of any contact changes such as a new address, email, phone number, or name change as soon as possible.

Know grace periods. After finishing school, you have a grace period before you must start making payments. Grace periods vary from loan to loan. Stay on top of this detail to avoid fees.

Be conscious of loans while in school. If possible, try to pay down student-loan debt while you’re still in school. You won’t have such a big chunk to pay after graduation.

Consider consolidation. Consider consolidating student loans to help manage payments. This could save you a lot of money in the long run, but be certain you can handle the combined payment before you consolidate.

Ask at Hopewell Federal Credit Union for advice about managing your existing student loans. Our professionals can offer guidance for your situation. Stop by or call us today at 740.522.8311.