Debt

How to Manage Debt After the Holidays: 13 Tips to Help You Recover

The Fellowship of Penny Calling Penny

December 30, 2022

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Table of Contents

Know-How Much is Left

Make a list of all your debts that should include the total amount of the debt, creditor, interest rate, due date, and monthly payments. You can also use a credit report to have a confirmation on your debt list.

If you have all the debts in front of your eyes, it will grant permission to you to look for the bigger picture and are also aware of your full debt picture. We have the software for debt reduction for these processes that will make our workload lighter. Remember the list that you have made. Refer to the list when you clear out your bills. Update the list every month as the total amount of debt changes. Therefore, we will let you know how to manage your debt during Christmas and New Year.

Prioritize Which Debts to Be Paid Early

Paying off a debt of credit cards is the perfect category as credit cards have higher interest rates than any other debt. Among all of your credit cards, the one with the high-interest rate mostly prioritizes its repayment as it costs high.

Use your debt list to rank and prioritize your debts in such a manner that you wish to pay them off. You can also select to pay off debt having the lowest balance. It may cost a little more in the long term, but kicking off small first can boost your confidence.

Create a Bill Payment Calendar every month

Make use of a bill payment calendar that will be fruitful for you in identifying your outstanding bills. Write the amount of each bill payment on your calendar after the due date. The next step you should follow is to fill in the date of each paycheck. You can also use the same calendar to get paid on the same days every month – the 1st and 15th. If your paychecks are categorized under different days of the month, you need to make a monthly calendar.

Maintain Accuracy While Paying Bills

Delays in payments make it even more challenging to pay off your debt. And if you do so, then you’ll have to bear the consequences and need to pay a late fee for every missed out payment.

Moreover, if you forget to pay two payments continuously, your finance and interest rate will also rise.

If you’re using a calendaring system on your smartphone or desktop, mention your payments there and set an alert for the outstanding payments.

In case if you forget to make a payment, do not wait till the next coming due date to clear your bills; by then, it can get filed under the credit bureau. We will suggest you make your payments as soon as you recall that you have missed paying off your debts.

Backup of an Emergency Fund

If you don’t have access to your savings, you would have to go into debt to cover emergency expenses. A small emergency fund will also cover your small expenses from daily work.

It would help if you worked on building a small emergency fund, and for this, $1000 is a good place from where you can start. Once you get that, make it your objective to create a bigger fund than before, such as $2000. Typically you wish to have a backup of around three to six months of your expenses.

Initiate By Making Little Payments

If you’re not able to pay anything more, atleast initiate making the little payments. Those little payments do not benefit you in real development when managing debts.

It provides a good position to your account, which ignores late fees. When you forget to make a payment, it becomes more challenging to catch up, and as a result, your account could turn out to be a default one.

Consolidate Debt With a Loan

Go for a debt consolidation loan to clear off all your debts. It is one of the best ways to manage debt, and it also becomes fruitful for you to have numerous interest rates and tenors debts.

Make sure that you’ll use a nominal ROI on a personal loan to consolidate your data into one payment only. These will make your work easier and provide you with enough time to clear out your debts.

Eye on Strict Budget

After the festivities get over, think carefully about which direction your money flows in each month. Closely watch out for all your finances and monitor what amount of your income must be spent and how to use the leftover cash.

If you have spent a lot on presents, then sit down with those gifts and plan for a strict budget to not cross the bar implemented by yourself only.

We will advise you not to splurge your money after and during Christmas and New Year.

Hold-on Your Little Luxuries

After the indulgence of Christmas and New Year, it might be a superb idea for your bank account to make a few changes in your regular lifestyle. Thus, we bring some things on which you can down on – or out fully:

Minimize the number of cigarettes you intake per day – It Will easily save money for you because you are not required to buy a new pack frequently.

Prepare lunch at home: Ready-made lunches can add up quickly, but purchasing bread and sandwich making and filling at home can save cash that can benefit you to cover your costs after Christmas.

Reduce your takeaway orders: Buying food to recreate takeaway dishes to your home is healthier and cheaper too. Also, you might even learn some fresh recipes to enjoy at home forever.

Skip the bar: Moving out to socialize every weekend is of great joy but not so good for you to maintain your bank balance. Invite your friends to your home and share a cheaper bottle of wine to save some extra cash for each month.

Look for Cheaper Alternatives

A perfect time to review your expenditures is a New Year, be it your weekly shopping, energy bills, or simply common outgoings that you make every month. If you’re looking for cheaper alternatives, it is time to load up a few comparison websites and look for a better deal on your payments for water or gas bills.

You can consider exchanging your weekly shop at your general supermarket for a low-budget store to cut down costly habits and compare prices like daily visits to coffee shops.

Return or Sell Any Unwanted Presents

It might sound like a strange or cruel one, but any Christmas gifts that are of no use to you (or perhaps have got a similar type of) can be sold or returned online to earn some extra cash. It can be put towards your necessary monthly expenses or if you have spent a lot on your credit card.

Focal Point Should Be on Your Well-Being

It is crucial to have control over our finances; we’re required to take a back step after the festivals get over. Make sure that we’re taking care of ourselves also. Christmas can make any financial challenges that you might be having to feel worse, possibly leading to anxiety and depression.

Remember to take some time for yourself and or talk to someone you trust about all your financial worries that you might have.

Start Planning for Next Year’s Holidays

It would not be too early if you start thinking about next years’, especially if you need to manage your debts. Plan things to maintain or manage your funds and control your extra spendings. Here are some things that you need to consider:

Sign up for a holiday scheme to receive vouchers for food and shopping. Supermarkets provide offers that include Christmas savings options, where your accumulated points are converted into money off coupons for December only. Therefore, it is a fantastic way of knowing that you have the money you require for shopping (purchasing presents, clothes, etc.) and food.

Invest a small amount of money into your savings account each month – Investing a small amount in a month can frequently add up and stop you from taking out a loan and going into debt for next Christmas on your purchases.

Look for the best offers: January sales and Boxing Day deals can provide a great opportunity for you to pick up early gifts at a cheaper rate to save your cash.

Hence, Penny Calling Penny recommends you to start planning and saving for next year’s holidays from today only so that your funds will be available to you when you need them.