The Best Way To Pay Down Holiday Debt For The New Year
Updated: Feb 8, 2022
The holiday season is filled with quality family time, new year resolutions and unfortunately damage to your wallet. Whether you spent money on gifts for your family and friends, or even yourself, it is important to begin paying down any debt you may have accumulated this holiday season. To take charge of your financial future, follow this list of efficient ways to begin paying down holiday debt for the New Year.
Start with a plan. Base the money you make and your budget on what is a need vs. want.
Get your spending under control by categorizing your income into categories including necessities (rent, car payments, groceries), obligations (minimum payments on credit card), and wants (restaurants, entertainment, coffee).
Look over expenses.
Regularly comb through your budget and re-evaluate what exactly your money is going towards. After finding possible expenses to cut, consider shifting this money towards your debt-reduction.
Find ways to dedicate more money to wiping out debt.
Look over your monthly spending and find opportunities to cut spending to get more savings out of your budget. And don’t ignore the small cuts, as these can add up faster than you think. For example, even finding a way to put aside an extra $200 will add up to a yearly $2,400 that can be put towards paying down debt.
Consider picking up a side hustle.
Having an extra income stream will help you pay off your debt quicker. This can be difficult to manage depending on the intensity of your current occupation and work hours. However, some can be done online and have flexible hours to help accommodate with your schedule.
Get yourself into good financial habits.
Consider ways you can modify your daily spending routine without sacrificing your lifestyle. This could include replacing your daily purchase of a latte by making your own cup in the morning. Consider bringing a lunch from home to work instead of buying food during the week.
Stick with the plan until your debt is paid off. Follow through with what you decided and reward yourself when you reach milestones. Once you are able to reach a goal, it is important to continue this progressive mindset for future financial endeavors.