Okay you did what you said you wouldn’t do. You are already beating yourself up, so a smack from me won’t help. Instead, I want to help you right the ship and keep that spending binge from haunting you for years to come. Here are my 5 tips for getting your act together to pay off the holiday and have a great debt-free new year.
1) Stop all unnecessary spending now! Hide the cards and vow to pay cash or use a debit card for all your spending until the debts are gone. Don’t take a vacation or splurge on any new stuff for yourself (or anyone else) until you do that. This serves two purposes: it reduces and eliminates your credit card debt and it is a great deterrent. That pain will stop you from indulging next time
2) Get a re-payment plan together. This means taking a hard look at how much money you bring in each month and how much you really spend. Figure out how much is leftover and apply it all to paying off that debt. If you don’t earn enough, cut more spending or make more money.
3) Attack the debt. Get your taxes done early if a refund is coming your way. Can you consolidate your debt to one lower interest card? If not, there are two approaches you can take. Either go after the card with the lowest balance first, for a psychological boost, or go after the card with the highest interest first, for a financial boost.
4) Let everyone in the family and maybe even your friends know about your plan. I know we hate to talk about our money mess-ups- but it could help eliminate any peer pressure spending and who knows you may get a great idea on how to raise money from a friend. Make it fun and make it a group challenge.
5) Don’t do it again! Next year, next vacation, next temptation- use cash or a debit card and live within your means. Doing anything else is so- pre-precession. Worrying about debt creates stress that shortens your life and makes your time here less enjoyable. In the words of the great Cher, snap out of it!