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The holidays are a time for loved ones and joy — and racking up extra debt in your efforts to spread the holiday cheer in the form of gifts and travel expenses! It’s not uncommon to see your spending go over-budget this time of year, but you can make sure to find ways to manage your expenses so that they don’t keep racking up interest. Here are some tips to help you formulate your holiday debt payoff and keep your costs as low as possible.
The best way to pay off debt is to make money that you can devote directly to the expenses you’ve accrued over the holidays. If you have time to find a part-time job over the weekends or a skill you could use to make money online, such as writing, editing or tutoring, now might be a great time to put your extra time and talent to work. Put the money into a separate account and use it to pay off the credit cards with the highest interest first.
While you might already have a savings plan in place, now is the time to double down on what you are putting away. Even an extra $5 a day can go a long way when it comes to paying off a few hundred dollars of debt. Look at your finances and see how much extra you think you can put aside, even if it’s only for the next month or two.
We all have necessary expenses and frivolous expenses. For instance, you might need to pay for fuel, rent and health insurance but you don’t actually need that daily latte and weekly trip to the spa. Cutting out a few expenses here and there means you’ll end up with extra cash to start paying down your debt. Once you have a handle on it, you can re-introduce these luxuries back into your life without any guilt.
Apps like Trim and Acorns help you save by rounding up the number of cents in every transaction and automatically setting that amount aside in a savings account. For instance, if you connect your debit card and spend $12.10 at a store, 90 cents will automatically be put away in savings. This can add up to quite a bit over time and chances are you won’t even notice it. Then you can use that money to start chipping away at your debt.
Don’t let your holiday debt overwhelm you — start taking small steps now and you’ll get a handle on it in no time.