Tips to Pay Off Credit Cards After the Holidays
December 2, 2016
The holiday season is filled with parties and gift giving, making it very easy to lose track of your spending. It’s important to manage your budget during and after the holidays to avoid compromising other financial goals when the New Year starts. Here are tips that will help you enjoy the holiday season without being financially stressed come January.
Plan Ahead to Control Credit Card Spending
Map out your spending and take advantage of any credit card rewards you have. Consider using reward points for gift cards that you can use to purchase holiday gifts, or use the points to pay your bill in January. Create a budget for how much you plan to spend on gifts and entertainment and stick to it. Be sure to take advantage of sales and price matching at stores while you’re shopping.
Dine In Rather Than Out
Whether you’re hosting a party or going out to dinner, you may find yourself spending more on food and drink during December. Rather than eating out at restaurants, consider celebrating with a potluck at a friend or family member’s house to save money. This is also a great way to cut back on entertainment expenses in the New Year while you’re looking to pay down any holiday debt.
Don’t Just Pay the Minimum Due on Your Credit Card
Paying down your credit cards is key to keeping your budget intact. While you may spend more than intended, paying more than the minimum payment on your credit cards is key to chipping away at these balances. To do so, you may have to make sacrifices in other areas of your budget.
Monitor Your Credit Card Spending
Take advantage of text and email alerts to keep track of what you’re spending. You can update your preferences to receive alerts when you’ve spent a certain amount so that you’re better able to stay within your budget.
Pay Off Small Balances First
Start with your credit cards that have small balances. If you pay these down first, you’ll begin to create momentum. As you pay one off, set your sites on the next until your debt is eliminated.
Reduce Your Spending
Every dollar counts when it comes to your budget! Consider bringing lunch to work, dining out less and cutting expenses on manicures and pedicures, for example, until your debt is paid down. Once you’ve eliminated your credit card debt, you can add these items back into your budget or put these funds toward other financial goals.
Get a Side Job
The easiest way to pay down debt is to increase your income. Consider a side job to earn extra cash that can be put towards your credit cards. Whether you decide to sell items on the Internet or become an Uber driver, for example, there are many opportunities for you to earn extra cash and get ahead sooner rather than later.
Use Your Bonus and / or Tax Refund
If you receive a bonus from your employer or a tax refund from the IRS, putting these funds toward your credit cards is a great way to pay off any balances. While you may have wanted to use this cash for another purpose, reducing or eliminating debt is liberating and can inspire you to plan ahead to save for the extra things you want.
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