You need to check up on your debt consolidation efforts. One of the most expensive seasons is upon us. That means your spending will rise this month and the next. It is inevitable. At least, this is true if you want to join the gift-giving season.
Holiday spending is more than just buying gifts. You need to buy decorations to make your home a little more festive. There are also a lot of events and social functions to join. That means you need clothes, accessories, and maybe even a gift or something to contribute to the party. Of course, let us not forget the food budget that you need to set aside for the special meal that you will serve.
All of these can easily lead anyone to overspend and threaten their debt consolidation program. This is why you need to think about holiday spending as early as now.
The truth is, it is very hard to join all the festivities without spending some amount of money. You need to think about the expenses because the joyful season may just make you risk overspending. When you feel so good about the situation, it is easy to give in to temptation.
But we all know that eventually, that good feeling will be gone – especially once you see just how much you have spent. It will just overshadow all the positive experiences that you had during the holidays. Instead of the good memories, you will feel regret over the things that you should have had more control over.
Not only that, you might have compromised the debt consolidation efforts you made the past few months. It is possible that you have made it worse.
Tips to continue debt consolidation efforts during the holidays
Fortunately for you, all it takes is a little bit of planning and a whole lot of self-discipline and control to avoid making this mistake. If you want to preserve all the hard work you put into your debt consolidation efforts, that is possible. You do not have to sacrifice the holiday spending as well.
Here are some tips that you can use to continue with your debt consolidation program despite the need to spend for the holidays.
Keep paying off your debts
First of all, your debt payments should be a priority. There are certain expenses that you can skip to give way for holiday spending. But this does not include your debt payments. You should always meet your financial and credit obligations. You need to pay your bills as usual – regardless of how much you spend during the holidays.
If the reports are true, it is expected that holiday spending will increase by 5% compared to last year. You need to protect your priority expenses from that expense. Do not let it stop you from meeting what needs to be paid.
Make a list of what you will spend
What makes holiday spending dangerous is when you go through with it blindly. It is okay to get excited about it but you have to approach it with a plan. This is especially true if you are in the midst of a debt relief program. You want to make sure that your spending will not compromise your debt consolidation efforts.
Creating a simple list will do the trick. It will give you an overview of what you have to spend on. Not only that, but it will also allow you to review your finances. That way, you can figure out just how much you can really afford.
In case it turns out that you do not have enough money to pay for everything on the list, you can start cutting back. Remove some expenses or find a way to get it without spending a lot of money. If you do this ahead of time, you can enjoy getting a lot of really good bargains and freebies in the process.
Increase your income
Another thing that you can do to make sure that your debt consolidation efforts will not be wasted is to increase your income. When you earn more, you can use that extra money to spend for the holidays. You do not have to worry about compromising your debt payments. Anything that you earn on the side will go towards your holiday spending fund.
There are many options to earn extra this holiday. Retailers are actually looking for extra hands to help them with the influx of customers. Even if experts believe that more people will be buying stuff online for the holidays, that does not mean retailers will not be prepared. There are still people who prefer to buy in stores to get a feel of the products that they will buy. You can try your luck with these retailers.
You can also get a side gig that you can do even after the holidays. Get a job online or capitalize on a hobby. This will not just help you get the funds for your holiday spending. It will also help you build wealth while paying off debt. It will also secure your source of income – since you now have two sources.
Keep your credit cards from ruining debt consolidation efforts
Ideally, you should keep yourself from using credit cards for the holidays. Admittedly, there are times when it cannot be helped. If you have to use your credit card, you need to make sure it will not compromise your debt consolidation efforts.
According to reports, Americans accumulated more than $1,000 of debt last year. If the forecast says that consumers will be spending more this year, there is a high chance that the holiday debt will increase as well. What is sad about this debt is the fact that more than half of those who borrowed it said it will take them 5 months or more to completely pay it off.
If you do not want to start the year worrying about debt, you just have to be smart with how you will use your credit cards. Here are some tips that you can use.
Plan how you will spend it
Always approach your credit card spending with a plan. It is not just about knowing how you will pay it back. You should know how to use it. If possible, do not use it to pay for everything you will spend on this holiday. Identify the specific purchases that will be charged on the card.
Stick with zero-interest purchases
One trick to avoid the high-interest rate on your credit card debts is to pay all the balance in full when the billing statement comes. However, if this is not possible and you have to split the payment plan into a couple of months, make sure to choose 0% interest rate purchases. At the very least, it should be purchased with a low-interest rate.
Make use of the rewards
It is also important for you to maximize the rewards on your card. Regardless if you have a point system or cash-back rewards, you need to make sure your purchases will make these increase. That way, you can use the points on something that might help you save money.
Limit the cards that you will use
If you have multiple credit cards choose which one you will use for holiday spending. That way, it is easier to track what you have spent so far. When you use multiple cards, it will just add to the debt consolidation efforts that you have to do. Try to make your life easier by just sticking to one card. Just make sure the card you will choose will help you earn more points or rewards.