For many, the holiday season is filled with long to-do lists, seemingly endless gatherings and many, many trips to the store for groceries and gifts. If the holidays left you saying, “ho, ho, holy cow how did I spend THAT much money?!” we have some tips to help pay off holiday spending.
How to pay off holiday spending
If it feels like you are being buried under a mountain of holiday expenses, it may seem impossible to get out of debt. The truth is, it WILL take time, but it is possible to pay off your holiday spending, even if you have a few years of holiday spending to pay off.
- Identify where your money is going. First things first, look back at your spending in November and December and compare it to your spending in September and October. Note the deviations in spending and highlight the biggest expenses. If these are larger payments to certain retailers, it may also be helpful to note what you bought at each one (such as gifts for the kids, new holiday decorations, etc.).
- Work on your budget: While it isn’t the most exciting thing to work on, having a budget is a big factor in reducing debt as it helps you understand where your money is going. Setting up a budget will also show you what times of the month your expenses are higher, so you can keep that in mind as you are making purchases. Setting a budget can also help you identify if you are falling behind on bills and help you make a plan to stay on top of your finances. If you are unable to make payments for loans or credit cards you have with Verve, call us at 800.448.9228 to discuss your options.
- Prioritize debt repayment: A big reason to pay off your debt is to reduce the amount you pay in interest or what financial institutions charge to lend you the money. For example, if you take three years to pay off $5,000 in debt on your credit card at a 16.16% APR, you’ll pay $1,342 just in interest. In addition, paying off debt means you have more money to set aside to build an emergency savings or holiday gifts savings account.
- Consolidate debt. If you have more than one credit card or loan, you could transfer all your loans to one financial institution and refinance them into one loan. This may mean a lower rate and paying less in the long run. It also means you’ll have one loan payment to remember. If you are interested in learning more about debt consolidation or are ready to get started, schedule a meeting with a Verve team member.