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Parenting Tips > How to
Manage Your Holiday Debt
How to Manage Your Holiday Debt
By Andrea Woroch
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 especially 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.
Andrea Woroch
www.andreaworoch.com/about/ 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.
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