While it may seem daunting when those holiday bills arrive in the mail, there are steps that consumers can take to eliminate their debt and get back on the right financial track.
Richmond, VA (PRWEB) January 12, 2007
The holidays are over and now you're wondering how you're going to pay for them while still maintaining a budget for the rest of the year's activities. However, holiday debt doesn't have to put a damper on your financial situation. With some planning, organization, and persistence, you can tackle it early and clear the decks for a happy and debt-free new year.
Total consumer holiday spending for 2006 was projected by the National Retail Federation to reach nearly $457 billion, that's more than $800 per consumer. With many holiday budgets blown, how can consumers get back on track?
"Even those consumers with the best budgetary intentions can steer off course during the holiday season," said Ann Estes, Vice President of Counseling Delivery and Client Education for ClearPoint Financial Solutions. "While it may seem daunting when those holiday bills arrive in the mail, there are steps that consumers can take to eliminate their debt and get back on the right financial track."
Here are some tips from ClearPoint Financial Solutions on how you can cure those winter blues and eliminate your post-holiday debt.
Get organized The first step in debt repayment is to determine how much you really owe. Gather all credit card bills and keep them in one central location, which will keep debt repayment top-of-mind. When all of the bills have come in, create a spreadsheet or other visual aid to help track payments. Staying organized will ensure that bills don't get lost, and that the debt gets repaid in a timely manner.
- More is better When those credit card bills start arriving in the mail, create a plan to have them paid off as quickly as possible. While it may be easier to make just the minimum payment, you'll eventually pay more over a longer period of time, because the interest will continue to accrue. Pay as much as you as you can each month, even if it is just a few dollars above the minimum payment. Additionally, knocking down your balance faster can be a real motivator in eliminating your debt.
- Snowball your payments If you have balances on multiple credit cards, it may be necessary to take a more aggressive payment approach to eliminate the balances. Figure out which cards charge the highest interest rates and make those a top priority. Concentrate the bulk of your total debt repayment on cards with the highest interest rate, while paying the minimum, or preferably a little more, on other cards. When the card with the highest balance is paid off, move to the card with the second highest balance and continue until each balance is paid in full. By approaching your repayment plan this way, you'll pay off the debt faster, and eliminate spending needless dollars on costly interest rates.
- Minimize Unnecessary Spending In order to effectively repay holiday debt, cut back on other non-essential spending. Remember, you still need to keep your overall household budget in mind. Holiday debt has now become a part of that overall budget, so you may need to make some adjustments in other areas. Instead of spending money on lunches and dinners out, bring your lunch to work or cook at home. Turn down the heat to lower the electric bill. Resist the temptation to shop post-holiday sales. The money you'll save from unnecessary luxuries can go towards your debt repayment, putting you in a better financial position for the rest of the year.
- Never Skip a Payment. And Never Pay Late Even if you find yourself in dire financial straits and you are finding it difficult to budget for debt repayment, never skip a payment on your credit card or submit a payment late. Doing so can result in costly late fees, higher interest rates, as well as a negative impact on your overall credit score. Paying the minimum payment is better than no payment at all. For more information on how making late payments can impact your credit, contact a credit counseling agency such as ClearPoint Financial Solutions.
- Give yourself an incentive It's always easier to work towards a goal when there is a prize waiting at the finish line. Consider treating yourself to a small, affordable luxury when the debt is repaid, such as a trip to the movies, a new outfit or a nice meal at one of your favorite restaurants. The point is to give yourself a pat on the back for achieving your goal, not to build up additional debt.
- Put a cap on it If you're currently working on repaying holiday debt, leave the credit card at home. Don't accrue additional debt and use only cash for purchases. If you can't afford to pay cash for a particular item, don't buy it.
- Plan ahead for next holiday season If you're struggling to pay off those holiday bills, chances are, you spent too much. Unless you know that your financial situation is going to improve by the next holiday season, develop a realistic budget for the next holiday, and only spend what you can really afford.
- Consult a Professional. Sometimes it's necessary to work with a professional organization trained to assist you with debt repayment. If you are having trouble paying your bills or need assistance in developing a financial roadmap, contact a consumer credit counseling service such as ClearPoint Financial Solutions, to assess your current financial situation and develop a plan to help you achieve your goals. For information on how ClearPoint can assist with your financial management, go to http://www.ClearpointFinancialSolutions.org or call 877-422-9044.
About ClearPoint Financial Solutions, Inc.
ClearPoint Financial Solutions, Inc.™ is a national non-profit organization dedicated to helping consumers achieve financial wellness through counseling and education. Established in 1980, ClearPoint has helped over one million individuals achieve financial security. ClearPoint is currently the only non-profit System-wide member of the Better Business Bureau (BBB), and one of the largest members of the National Foundation for Credit Counseling (NFCC). Headquartered in Richmond, Virginia, ClearPoint manages branches across the country. Personalized and confidential consultations are available in person, by phone or online. Visit ClearPoint Financial Solutions at http://www.ClearPointFinancialSolutions.org or call 877-422-9044. Credit Counselors, CDC Consumer Debt Counseling, and Solutions, Inc. are all trade names of ClearPoint.
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