Now that the holidays are over, you might want to consider getting started on debt consolidation. In fact, we can say that consolidating credit and post-holiday debt is probably the best match for the beginning of the year.
According to statistics, the holiday debt went up from $1,054 in 2017 to $1,230 in 2018. That means people will have more debt to pay off. Although the economy is currently doing well, that does not mean we should be reckless with how we use debt. It is very easy to get caught up in the gift-giving season but you also have to consider how you want to face the New Year.
Do you really want to have a lot of debt when we transition into the coming year?
Of course, we understand how some people will risk having debt as long as they can make their holidays happier. In case you did rack up a sizable holiday debt, the least you can do is to work on it as soon as possible. While you have every right to postpone it, there is nothing good that will come out of that.
Fortunately for you, there is a way for you to deal with post-holiday debt and that involves using a debt consolidation program.
Why consolidate your post-holiday debt
You may be wondering, why does it make sense to consolidate debt after the holidays?
There are many benefits to using this debt relief program to get out of debt. However, there are two specific reasons why it would be beneficial to do it after the holidays.
It shows you a clear picture of your debt payments at the top of the year
First of all, it helps you start the year correctly. After all the celebrations are done, it is easy to forget about the money that you borrowed to finance everything you needed for the holidays. This is actually a bad idea. You need to immediately pay it off – especially if you used high-interest credit cards. These can quickly grow your credit obligations if you are not careful.
Part of the debt consolidation process is to take a look at all your debts so you can decide which ones you will combine. You also need to decide if you have an existing credit account that you can use to combine the other debts (e.g. home equity loan). This is a great way to see the clear picture of your post-holiday debt. If you have other debts that were in existence before the holidays, feel free to include it. Once you have done this, it is easier for you to figure out how you can maximize the process of consolidating debt so it significantly improves your financial situation this year.
You can aggressively pay down your holiday debt easier
Sometimes, people feel stressed about their debts because they have no idea how much they really owe. At the back of their minds, all they know is that they owe a lot of debts and it is scattered across multiple accounts. You have to understand that the uncertainty is influencing your stress levels more than the actual debt itself.
When you understand how much you owe, you will feel more in control of your finances. That control can decrease the stress that you feel. If you are not overwhelmed by stress, you can make better decisions about your finances. It is easier for you to improve your time management skills so you can maximize the effects of this debt relief option. You can focus more on increasing your income so you can pay off your debts faster.
What to avoid when consolidating post-holiday debt
Now that you know why debt consolidation and your post-holiday debt is a good match, it is time to find out the things that can compromise the success of your efforts. There are two important things that you need to keep in mind while you are paying off your debts after consolidating it.
Adding a huge debt amount at the start of the year
The thing about consolidating debt is that it can be tempting to use more credit. You feel like you already paid off your debts when in fact, you just shifted it under one credit account. You need to make sure that you can fight the urge to borrow more money. That is really challenging especially since our society loves to use credit. In fact, reports reveal that Americans pile on debt faster than the growth of the economy. Try to make sure that you will not add to your debt anymore. This is only temporary – until after you have paid off your debts. Once your debts are gone, you can start using credit once more – but make sure you do it smartly this time.
Thinking you have the whole year to pay and miss a couple of them
Another thing that you need to keep in mind is that it is more beneficial for you to take care of your debts as soon as possible. Some people think that they still have the whole year to pay off the holiday debt. This is a mindset that you need to get rid of – preferably in every aspect of your life. Procrastination may bring you more harm than good. When it comes to debt, the earlier you take care of it, the less damage it can bring to your finances. Make sure that you stay smart with your debts by paying them off as soon as you possibly can.