Have Holiday Shopping Debt? Here's How To Handle It
The holiday season can come with many expenses and emotions. It's natural to want to spoil the people you love, but gift-giving can take a serious toll on your finances. If you went into debt from shopping this holiday season, you're not alone. Around half of Americans are expected to go into some debt from holiday shopping this year, and 37% will be paying it off for months.
With some planning and dedication, you can pay off your debt. Here are some ways you can approach it.
LOOK AT YOUR FINANCES
First, see how much debt you’ve accrued over the holidays. List out how much you owe and what the interest rates are. Then, see how much you earn and spend in a month. Knowing the basics of your financial situation is necessary to form a repayment plan.
FIGURE OUT A REPAYMENT STRATEGY
A credit counselor can help you figure out a way to repay what you owe, or you can work on making a plan yourself. It’s a good idea to have a plan so you know what needs to be done to get out of holiday debt. Paying off whatever debt comes with the highest interest first is a popular and wise way of approaching debt. Making payments on time should also be part of your strategy.
REDUCE YOUR EXPENSES
You’ll need to figure out how to make more money or cut your current spending to handle holiday shopping debt. First, consider your non-negotiables. You have to buy groceries, but maybe you haven’t been shopping at the cheapest stores, clipping coupons, or earning rewards points where you shop. Or, maybe you’ve been cranking up the heat and could stand to lower your home’s temperature a bit, and therefore lessen your heating bill. Figure out what changes you can make, if any, to make your expenses more affordable.
MAKE A BUDGET
Handling holiday debt should involve more than just paying it off — you should also figure out practical ways to avoid making the same mistakes the next holiday season. The best way to get debt paid off and avoid holiday debt from happening again is to revamp your budget.
Figure out where you went wrong in the past year. Maybe next year you can focus on shopping more sales, saving more throughout the year, or making homemade, cheaper gifts. No matter what your financial situation is, taking another look at your budget for the year ahead can ensure you don’t accumulate more debt.
At INOVA Federal, we want all of our members to have healthy finances. That’s why we’re always within reach to help you reach your goals.
We want to help you learn how to make the most of your membership, whether that’s by helping you select a checking account or sharing information about our rewards program. Stop in and see us at one of our convenient locations, or visit us online to learn more about how we can help.