Christmas spending is often compared to a delayed hangover: For the first couple of weeks after Christmas, life is good. Then the bills start arriving in the mail and your Christmas debt hangover hits like a freight train. Now that the damage is done, how do you cure a Christmas debt hangover?
Assess the damage
First up is determining exactly how much you’ve spent for Christmas. Once you have a clearer idea of how much you owe, you’ll be able to plan how to repay it. Make a list of all your debts including who you owe money to, how much you owe, and the due date for repayment each month. It’s a good idea to refer back to this list and to update it as you repay your debt.
Demolish your debt
Late payment fees and interest charges only add to your debt so avoid missing repayments by using a calendar reminder system to keep you on track. Set up a budget to help you stay within your spending limit and to work out how much you can realistically afford to pay back each month.
You may need to prioritise those debts that cost you more – those with higher fees and interest rate charges – and pay them down first. Or you could consider consolidating your debt into one loan repayment to make repayments easier to manage.
Cut back on spending
Remove the temptation to spend by putting away your credit cards: Curing a Christmas debt hangover won’t work if you simply keep spending. You could also consider cutting back on all other unnecessary expenses at least for the next 60 days to really get control of your spending.
It’s impossible to turn back the clock but it’s not too late to commit to a firm resolution of reducing your debt come next Christmas; and there’s no better time to do that than the beginning of a new year!
Decide how much you’ll need to save up during this year, so you won’t have to go into debt in December. Once you’ve decided on a number, open a savings account and set up automatic transfers into your Christmas savings fund each payday.
It’s easy to feel overwhelmed when your mountain of debt isn’t reducing as quickly as you’d like. You may need to call in some help to find a permanent solution to managing your debt. If you’d like advice about a debt consolidation loan to help you get on top of your debt, contact a Mortgage Express adviser.
For more tips and advice around managing your money, consolidating your debts, or applying for finance, follow Mortgage Express on Facebook and Twitter, or contact one of our mortgage advisers.
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