The new year is finally here! We still have the sweet memories of the holiday season. The spending, however, has left some of us with post-holiday debt. Holiday expenses, buying gifts, the food and so much more. It is a ghost that will be hovering over our bank accounts for the better part of January. If you don’t plan yourself well, your post-holiday debt will spiral to February, March and maybe the rest of the months.
Do the math
The first step is getting the total amount of your holiday debt. Did you use credit cards? Take a personal loan to finance any holiday expenses? Or maybe you borrowed a few bucks from your loved ones. Whichever debt it is, sit down with your notepad or excel and list them all down. The amounts owed should include any interests plus monthly payments.
Make a repayment plan
Depending on the amount of holiday debt you have accumulated, it is very likely that you cannot afford to repay it all at once. Remember the list we made with all the debts? Using that list, you can opt to repay the smaller debts first. If there is a loved one you owe a few dollars or shillings repay them first. There is no need to create a rift between you and your loved ones because of money.
You can also decide to repay debts with high-interest rates first. The longer you take to clear those the more you will pay in terms of interest. While you are it, if you are in a position to pay more than minimum of this debt, the sooner you can clear it and the less interest you will repay.
All you need to do is make a repayment plan that suits you and stick to it.
Reduce your expenses and save
To clear your post-holiday debts, you can try reducing your daily expenses and save that money. If you eat out too often, start cooking as much as possible. You would be surprised by how much you can save from this. You will also be eating healthy, so, it is a win-win.
Go through all your expenses, from grocery expenses to transport and utility bills. Find those that you can reduce by any percentage and work towards achieving that. You can use the money you have saved at the end of the month to clear some of these debts.
You can use a side hustle to sort your post-holiday debt
If you have a side hustle, take advantage of the money you make and use it to pay off these debts or your daily expenses. Any extra buck made will go a long way in helping you with your daily expenses or clearing those holiday debts.
Let out any extra space you have at your home or apartment through Airbnb. Any unused items or clothes in your home can find better use in other people’s homes. Sell them for some extra cash. Additionally, there are many freelance jobs such as writing, taking surveys, or even as a professional consultant.
Make use of your skills and hobbies and you just might clear your debts in no time.
Ditch your credit card
You are working towards clearing your post-holiday debt not accumulating more debt. This would be the right time to ditch your credit card or cards if you have more than one. Credit cards will just get yourself deeper into debt.
Before you use your credit card for any purchases, think thrice- is it really necessary? If it is not necessary then it’s probably not a matter of life or death, pass.
Be ready for next holiday
To avoid being the same post-holiday debt hole next season, start preparing early. And by preparing, I mean saving.
Table banking is one of the ways to achieve this. You can organize with your loved ones and come up with a saving group to help you achieve your saving dream. Alternatively, you can take advantage of the 2019 52 weeks money challenge template. It is an automated saving plan for the whole year, where you save a certain amount of money every week. By the end of the year, you will have saved enough money to cater for your holiday expenses.
Are you struggling with post-holiday debts? What plan do you have in mind? Let us know what repayment plan you have.