Even though 2014 has come and gone the reality is that it has only been a couple of months since December and our favourite holiday, Christmas. For many of us, Christmas may be an extremely expensive time of year – while it is certainly can be very joyful, this joy can also cause us to overspend.
One common action for spending for Christmas-related expenses, is the quick swipe of a credit card here and there. This certainly can add up and as a result debt can quickly accumulate. If you have accumulated lots of credit card debt from your holiday spending, you are not alone. If your next goal is to pay off some of this debt, here are some ideas about how to relieve your 2014 debt and lighten your load in 2015.
Strategies for Paying off Christmas Credit Card Debt:
Pay off More than Just the Minimum
This first strategy can apply for any credit card payment plan where you are not able to pay off the credit card in full each month. Typically the higher your credit card balance gets the harder it is to pay off more than the minimum payment. Additionally, at this rate you are also paying off only the interest and not really making much of a difference in your debt relief. If you are only paying off interest charges from your Christmas debt, it likely will take quite a long time – even years to pay it off. This makes a clear case for paying off more than just the minimum each month. If you have some additional money, you can use this to pay off more than the minimum payment for several months until its paid off.
One additional method of being able to pay off more than the minimum balance that I have mentioned before is to make two separate minimum payments in the same month. This part of the strategy can be an effective way to pay off more than the bare minimum, even if you can’t make that payment all in one lump sum. Particularly for those who get paid on a bi-monthly schedule, this can align well with your incoming funds and help you pay off more than what you can typically afford all at once.
Use your Tax Refund to Pay off Your Debt
If you are expecting a tax refund this year that is of a decent amount, you could opt to use this money to help pay off some, if not all of your Christmas credit card balances. While you may have hoped that you’d be able to use this money for something else, this may instead be a chance for you to get out in front of your credit card debt. This can help you improve your 2015 financial position moving forward, in many ways. You can improve your credit score by paying off your debts as credit card debt is often one of the areas that can negatively impact your score. Next, you are also likely to find that have opened up more opportunities for loan approval in the future. With the first strategy being the first approach to take to paying your debts, by the time your tax return arrives, you can use the money to pay off the remainder of that holiday debt.
Budget for Next Year’s Christmas Expenses NOW
You can start to budget for next Christmas by taking an inventory of how much you spent on the holidays last time. This not only includes gifts, but may also include Christmas dinner expenses, holiday parties, outfits and decorations. Acknowledging the costs off all of these things can give you a clearer idea of how much you will need to save and budget for, for next December. What this can also help you realize is how much you may actually be able be able to cut back on for future holiday expenses. While some areas may not be as easily minimized, some you may find do not end up being a necessary purchase. If you can save more, cut back on potential purchases, you may just find that you won’t have to rely on your credit card for next December’s expenses as much, if at all – and you can lower your risk of accumulating as much debt.
Once again, planning ahead can be your best friend in many areas – and in this case, there are ways you can avoid overspending on the cost of Christmas next time around. As mentioned, Christmas is meant to be a happy time where you have the chance to spend time with family and friends – as well as think about the beauty of life and the spirit of giving. In order to avoid having feelings of regret and stress associated with spending beyond your means and a growing level of debt, aiming to budget more effectively for the 2015 holiday season can be a very good place to start.
While looking ahead can help you out for next time, you still need to help pay off your current debts. Looking for strategies that are geared towards credit card debts can help you focus on the situation at hand, face your current credit card debt head on and pay it off in time for your future expenses.
