If you’re finding your wallet much lighter after the holiday season, you’re not alone. Many people go into debt during the holidays, and getting out may seem tricky. However, there are a few steps you can take to make the process easier.
The first step is to make a solid plan. Many people just assume they can get back to work and pay off their debt easily. The problem is if you’ve amassed too much debt, it may not be so easy to pay off. The planning process must include finding out how deeply in debt you are. By looking at your debt, considering your income, and knowing your interest rates, you can make a more effective plan. Try making plans that eliminate the debt as quickly as possible.
The next step is to prioritize which debt to shake off first. Start with the credit cards that carry the highest interest rates. Also, make sure you pay yourself before you pay your debts. If you’re paying more in interest than you are making, then that is a bad sign. Make sure you don’t close a credit card because closing a card with holiday debt will wreak havoc on your credit score. Instead, you can cut the credit card to make sure it isn’t used to amass more debt, while keeping the account open.
Lastly, in order to be able to pay off your debt, be sure to cut expenses as well. This is only a temporary measure, but it is often critical to dropping your debt at the lowest cost possible. Start cutting your expenses in entertainment and eating out. Eat in and try to entertain yourself frugally until you are in a better financial situation.
