Tips to recover from holiday debts

By
Nicole Si
·
Dec 29, 2020
Tips to recover from holiday debts

The holidays are nearly over and while we all prepare to face the new normal in the new year, we are to conquer yet another challenge – holiday debts. At this time of the year, credit card statements will start to roll with all the purchases you made. prompts from online cash loan lenders will keep on coming to remind you of your due date. There is nothing to be ashamed of because the Filipino hospitality and love for gatherings make every holiday splurge normal and acceptable. But what should you do next to stop payment prompts from sneaking up on you?

Stop spending

Holiday debt can haunt you forever if not addressed right. The first step to resolving this issue is to avoid spending on non-essentials at all costs. It is time to tighten the belt and evaluate what needs to be prioritized. The fun times are gone and facing reality means letting go of luxuries and wants which can take a toll on your funds.

When you decide to stop spending, opt to find ways that could lead to reducing your consumption and purchases. Be content with what you have at the moment and find the time and effort to innovate at-home resources.

Evaluate your situation

How much of your credit limit is left? Did you spend everything from your loan with a low-interest rate? What portion of your monthly salary will be assigned to debt repayment? Knowing your financial situation after the holidays can help you explore more opportunities to earn extra cash. Your cash burn measures also highly depend on how badly indebted you are after splurging.

Your evaluation should start with a list of debts, minimum monthly payment required, due dates, and interest rates. For instance, indicate how soon you should be paying off the amount you spent on Christmas gifts. Will you pay in installment or a lump sum? Do you need to apply for a cash loan online to pay off debts over your budget?

Save money

People will always remind you to save money, but do you know how and where to begin this? Cutting back on your expenses will stop you from spending. Saving money starts with reinventing your routine from paying for carpool to taking a cheaper mode of public transport. You can also transition from ordering lunches online to cooking your food at home. Take advantage of your free time to do some chores, which you used to pay for to be accomplished such as doing the laundry, home cleaning, and pet grooming.


Plan the purchase of expensive items

Your unplanned purchases can ruin your entire budget not just for a month but for a year and forever. You might find it hard to recover if you keep on buying big-ticket items from your regular salary. If you’re eyeing for a 50-inch smart TV to be placed on your sala to welcome 2021, then you should have already saved for it six months ago. You can also check out a loan online that allows you to buy from Lazada and pay the item through a loaned amount. You can always apply for a loan as long as you already planned how to pay for it.

Create a money map

The global positioning system or GPS is a satellite-based navigation tool that lets you see your location and direction. The same principle can be applied to a money map that is created to help you identify your starting point, your route, and the destination. Aside from using a budget system, a money map is your guide to resolving financial issues while you take control of how to do it.

With a money map, you can keep track of where your money comes, where it goes, stay out of debt, and plan for the future. No money map is perfect, but as time goes by, they would require adjustments and revisions depending on your situation.

woman-holding-saving-account-passbook-using-computer-laptop-account-saving-concept


Don’t skip payments

Skipping one payment can lead to a more critical financial situation. You might be tempted to pay only the minimum amount on your credit card debt but make sure to get back on track as soon as your finances allow. Skipping payments is expensive because banks and lenders impose penalties. Although there may be pandemic-related debt relief measures implemented nationwide, it will still help if you consistently keep up with your due dates to avoid costly charges on delinquencies.


Turn some gifts into cash

You received gifts last holiday season, and some of these may not seem useful or beneficial for you. Instead of storing them or giving them away, you can check on their current value and have them on sale. If you received some gift cards, check if you can turn them into cash or have them sent back to the store for other forms of credit.

The road to smart holiday spending is long and winding because temptations of bargains, sales, and promos are easily accessible. If you don’t want to drown in holiday debts, then start saving for the upcoming holidays, plan your purchases early and look for ways to fund these without taking out money from your regular salary.



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