Now that the holidays are over, reality is nipping at your heels. The credit card bills arrive, and you are wondering how in the world you are going to manage just the minimum payments. Then you chastise yourself for overspending and running up your credit cards. What do you do next?
1) Establish a Christmas Account for Next Year:
This may seem like a nonsensical idea – after all, you can’t even pay your card payments now, and how are you going to save for the holidays next year? But, believe me. It can be done.
Have $10.00 a month automatically deposited into your Christmas account. Though this amount will only yield $120 of spending money at the end of the year, it will help you to get used to putting a little something away for later. You can raise the automatic deposit amount later.
2) Only carry one credit card (for emergencies), and put the rest in a safe place out of sight. Do not use them.
3) Reel in Your Spending:
There are a gazillion ways to save money. Collect coupons and use them when you grocery shop. When couponing, never buy something that you wouldn’t normally buy. If you use coupons on sale items, you can save a boatload of money. Some markets will even double or triple those same coupons.
Always check the sale items in the store first. In some markets there is a clearance aisle. By doubling coupons on these items, you can end up paying nothing!
Shop once a week, eat before you shop, arm yourself with a list, and you will save, save, save.
On every outing try to cut corners by using your ingenuity. This makes saving money turn into a game.
Rent a couple of videos, pop some popcorn, and spend the night sprawled out on the couch with your family. You can have just as much fun staying home and watching those flicks as you can by spending a bundle at the theatre.
When you do go to the movie theatre, go to the matinee – which is always half the evening price. Bring your own popcorn, soda pop and candy. Even though the theatre doesn’t allow you to bring in outside food, they are NOT going to frisk you going in. I promise! Just carry a big, big purse.
Consolidate trips. Do as much as you can while you are out and about, instead of leaving, then coming home, and leaving again. You will save valuable time and gasoline.
For birthdays, Christmas, Hanukkah, anniversaries, and other gift-giving holidays, set a limit on what you are going to spend. For example, if you spent $100 on each child for Christmas this year, next year spend $50. Your children will forgive you.
Why Do You Spend?
Many people relieve stress by shopping. In fact, people – many who were making less than they were last year – actually spent more during the holidays this year. Does that make sense? No!
Ask yourself why you are spending so much and so often. Consider why it is so important to spend so much money on eating out and other family recreation. You can be just as close going on a picnic as you can eating at The Red Lobster, and you will spend a lot less money. Try brown bagging it at work four days a week and eating out one day. Think of the dollars that you can save.
Dump Your Savings into Credit:
Here is the fun part. Take all (and I do mean ALL) of the money that you save from reeling in your spending and dump it into either your highest interest credit card or your lowest balance credit card. Pay the minimum payment plus $1.00 on everything else. You will immediately begin to see the principal balance getting smaller. When you are done paying off one card, take what you were paying on that card and dump it into the next credit card and the next and the next – until they are all paid off.
Remember that Christmas account?
After a month of paying down your credit, raise your automatic Christmas-account deposit to $50.00. This will provide you with $550 to spend on Christmas next year.
You Can Do It:
Don’t let yourself get duped into getting loans to pay off credit cards. By cutting back and paying off your credit cards, you can avoid equity loans and other financial maneuvers that can put your security in peril. By digging your way out of debt one credit card at a time and putting away money for gifts and special occasions, you will soon be debt free.
SOURCES:
Debt Reduction Strategies Take Center Stage in January. (2011). Credit Loan – Real Answers. Real Solutions. Retrieved on January 11, 2011, from http://www.creditloan.com/blog/2011/01/05/debt-reduction-strategies-take-center-stage-in-january/
Different Debt Reduction Strategies. (n.d.). Wealth Informatics – Financial Freedom Through Information. Retrieved on January 11, 2011, from http://www.wealthinformatics.com/2011/01/09/different-debt-reduction-strategies/
Motley Fool Staff. (2011). 9 Ways to Pay Off Debt. The Motley Fool (of Fool.com). Retrieved on January 11, 2011, from http://www.fool.com/personal-finance/credit/9-ways-to-pay-off-debt.aspx