<\/p>\n
You\u2019ll be glad to know that there are plenty of things that you can do to pay down holiday debt.<\/p>\n
And these things are easy to do as well.<\/p>\n
Below, I tell you exactly how to pay off holiday debt \u2013 in a stress-free, achievable way!<\/p>\n
So if you went a little overboard with the spending over the holidays, follow our plan to become debt-free.<\/p>\n
Okay, so paying off your holiday debts is possible.<\/p>\n
I\u2019m going to give you some easy steps for doing so.<\/p>\n
Now, I\u2019m not going to say that these tips will make you debt free in one month, or two months, or three months, etc.<\/p>\n
Since everyone\u2019s different when it comes to their income and outgoings, giving an exact timeframe for when you can pay off your debts just isn\u2019t realistic.<\/p>\n
These tips will allow you to pay down your debts quickly.<\/p>\n
But, while one person may have the financial means to pay off their debts within just two months, it might take another person four months, and for some people, it might take six months or more.<\/p>\n
This plan will work for everyone. Just don\u2019t beat yourself up about how long it takes to become debt-free.<\/p>\n
The first step to becoming debt-free is to come up with a good plan of action. If you go into this process without any planning or preparation, you\u2019re likely to fall at the first hurdle.<\/p>\n
You\u2019re probably sick of hearing about goals for 2020 already.<\/p>\n
But, when it comes to finances, they really do work.<\/p>\n
This is because goals help to keep you on track.<\/p>\n
Write down how much debt you owe.<\/p>\n
Then, write down when you\u2019d like to pay it down by.<\/p>\n
It\u2019s so important to break large goals down into smaller ones.<\/p>\n
Paying off $2,000 in debt seems like a huge number. Break that down into $500 a month though, and that goal doesn\u2019t seem quite so huge.<\/p>\n
If you have $3,000 worth of debt to pay down, trying to do that by January 31st<\/sup> likely isn\u2019t possible \u2013 especially if you earn close to what you spend.<\/p>\n Be realistic with your financial goals.<\/p>\n Doing this allows you to better stay on track.<\/p>\n When you know that you only need to pay down $500, rather than $3,000 by the end of January, that seems more achievable. So, you\u2019re more likely to stick with your plan.<\/p>\n Doing a little financial inventory is the best place to start when paying off debt.<\/p>\n Just make a list of all of your expenses,<\/p>\n Make sure that you go through your bank account to include small expenses, like coffee, as well as those big expenses, like mortgage or rent payments.<\/p>\n Know exactly how much you spend each month.<\/p>\n Next, write down how much money you bring in each month.<\/p>\n When you know your income and exactly how much money goes out of your account monthly, you\u2019ll know how much money you have leftover to pay your debts.<\/p>\n Now, this might be a decent amount that allows you to pay off a good chunk of your debt each month. Or your income and your outgoings could be very similar, leaving you with little cash left over to service debts.<\/p>\n If that\u2019s the case, then don\u2019t worry. There are things you can do to reduce your expenses, without making yourself miserable, and there are plenty of ways to increase your income.<\/p>\n Below, I\u2019ll cover ways you can increase your income, and cut your spending.<\/p>\n Now that you know exactly how much you currently spend and earn, you can create a budget.<\/p>\n Creating a budget<\/a> is one of the best things you can do for your finances.<\/p>\n Having a budget keeps you on track for your financial goals.<\/p>\n Now, your budget shouldn\u2019t be too stringent.<\/p>\n I know that sounds counterproductive, but a budget that allows for flexibility actually works out better in the long term.<\/p>\n Give yourself a set amount to spend on each category.<\/p>\n Of course, things like car payments, and mortgage payments<\/a> may be set, so you have to pay a certain amount to those.<\/p>\n You can cut back in other areas, like groceries, for example.<\/p>\n So, put a dollar amount next to each category that tells you exactly how much you can afford to spend each month.<\/p>\n When putting dollar amounts next to things, make sure you don\u2019t create a budget that\u2019s too restrictive.<\/p>\n If you spend $800 on groceries each month, allocating just $400 to groceries isn\u2019t a good idea. Sure, we\u2019d all like to cut our bills in half, but ask yourself, is that really possible?<\/p>\n A good budget is one that\u2019s flexible.<\/p>\n The next step is to restructure your debts.<\/p>\n You can do this in a couple of ways:<\/p>\n If you racked up quite a bit of credit card debt during the holidays, then consider transferring your balance onto a zero-interest card.<\/p>\n This will save you money on interest charges.<\/p>\n When you transfer your balance to a card with zero-interest, you\u2019re not adding more interest charges onto the debt that you already owe.<\/p>\n This can make a huge difference.<\/p>\n You could save yourself $100s in interest charges.<\/p>\n When you\u2019re paying off debts, any time you can save money you should jump at the opportunity.<\/p>\n If you have lots of different debts, having to make multiple payments can be quite difficult.<\/p>\n Making just one payment each month is much easier.<\/p>\n Firstly, you only have to factor in one payment for the month.<\/p>\n Secondly, you won\u2019t have additional minimum payments to make each month. This means that your money won\u2019t be tied up.<\/p>\n You can use this freed up cash to pay down just one debt.<\/p>\n It basically enables you to focus all the money you have on paying down a single debt.<\/p>\n This can make the whole process a lot less complicated and much less stressful!<\/p>\n Now you have your goals, a budget, and you may have considered restructuring your debts to make them easier to pay down.<\/p>\n Next, it\u2019s time to focus on saving money.<\/p>\n Saving is something we should all be doing, yet many of us avoid it.<\/p>\n When it comes to paying off debts, the more money you have to allocate to them, the quicker it\u2019s going to be.<\/p>\n That\u2019s why saving money by making a few small changes to your spending habits can be really useful.<\/p>\n It frees up more of your cash to put towards debts.<\/p>\n So, below, I\u2019m going to give you some tips for saving more money.<\/p>\n If you\u2019re making a similar amount to what you spend, then you aren\u2019t going to have much left over to tackle your holiday debt.<\/p>\n So, if that\u2019s the case, you need to see if there\u2019s anywhere you could cut back.<\/p>\n For example:<\/strong><\/p>\n You might have to change your spending habits a little to improve your finances.<\/p>\n Of course, you don\u2019t want to make yourself miserable by cutting out everything that you enjoy.<\/p>\n So, just pick a couple of things that you could cut back on, and it could make a big difference.<\/p>\n If you\u2019re racked up a lot of holiday debt, you need to take steps to stop yourself from accumulating more debt.<\/p>\n One of the easiest ways to do this is to simply leave your credit cards at home when you go shopping.<\/p>\n Take them out of your wallet, and leave them at home.<\/p>\n Instead, use your debit card or cash when you do spend money.<\/p>\n You can always pick your credit cards back up when you\u2019ve paid off your debts.<\/p>\n Just use them wisely! You don\u2019t want to get yourself back into debt again.<\/p>\n Having your card information stored with online retailers makes shopping a whole lot easier.<\/p>\n I know, it\u2019s so convenient!<\/p>\n But it\u2019s that convenience that makes it easier to spend money.<\/p>\n When you only have to click a button during the online checkout to spend cash instantly, it\u2019s easy to spend money that you might not have otherwise.<\/p>\n When you have to manually enter your card details, you have more time to decide if you actually need the product or service you\u2019re planning to buy.<\/p>\n So, delete your card information from online stores.<\/p>\n It\u2019s such an easy way to cut spending!<\/p>\n Okay, so when you\u2019re trying to save money, you should be cutting down on purchases.<\/p>\n But, we all have to buy things, even if we are on a budget.<\/p>\n If you are going to spend money though, do it the smart way:<\/p>\n Use coupons and cashback websites!<\/p>\n Coupon websites list coupons for online retailers, and many provide you with printable coupons as well.<\/p>\n If you\u2019re planning to buy something, make sure you check out these<\/a> awesome couponing sites:<\/p>\n You could easily save yourself money by using these sites.<\/p>\n Coupons can save you money, but cashback sites can get you money back!<\/p>\n So, we\u2019d highly recommend using both, where possible.<\/p>\n Many sites offer cashback and coupons, which is handy.<\/p>\n Here are some great cashback sites:<\/p>\n For a bigger list, check out this list<\/a> of the top cashback websites.<\/p>\n These sites give you anywhere from 1% to 70% cashback \u2013 you can get higher rates occasionally.<\/p>\n Some sites will give you a dollar amount back instead, like get $10 back when you spend $50, for example.<\/p>\n If you shop in-store a lot, then rebate apps are your friend.<\/p>\n Some great rebate apps include:<\/p>\n Some of these apps<\/a>, like ReceiptPal will pay you for any itemized receipt.<\/p>\n Others, like Ibotta, will give you a rebate when you buy specific items.<\/p>\n Now, what\u2019s great about these apps is that you can upload your receipt to all of these apps and get paid multiple times.<\/p>\n Coupon websites, cashback websites, and apps that offer coupons and rebates are awesome.<\/p>\n But another way to save cash that\u2019s so easy is by using browser extensions<\/a>, like:<\/p>\n These extensions automatically search for coupons online, and apply the best ones to your order.<\/p>\n What I like about extensions like Wikibuy is that they find coupons that actually work!<\/p>\n You have no idea how time-saving that is.<\/p>\n I know how time-consuming it is trying lots of different coupon codes to find one that actually works, which is why these browser extensions are so awesome.<\/p>\n Now, coupons aren\u2019t all these extensions have to offer.<\/p>\n Some extensions, like Extrabux, for example, also give you cashback automatically!<\/p>\n Decreasing your outgoings is great for your financial health.<\/p>\n But I know it\u2019s just not possible for everyone.<\/p>\n Often, you\u2019ve cut back as much as you can, so you can\u2019t really free up any more of your income to put towards your debts.<\/p>\n If you\u2019re on a low income, cutting back just isn\u2019t possible.<\/p>\n That\u2019s why I\u2019d recommend making extra cash to anyone who\u2019s looking to get in better financial shape.<\/p>\n Increasing your income gives you more money to put towards your debts.<\/p>\n Not only that but putting a little more cash into your bank account just gives you some more breathing room in your budget in general.<\/p>\n In this section, I\u2019m going to cover a few ways you can bring in a little extra cash.<\/p>\n Now, I\u2019m not going to go into too much for each one, because we do have some great posts on making money, which I\u2019ll link to below.<\/p>\n Here are some ways you could bring in some extra cash:<\/p>\n Okay, so this isn\u2019t a way to make a consistent income, but it can free up some cash quickly.<\/p>\n After the holidays, we usually have a lot of new stuff. So, by selling stuff, you can make room for new things, while making some money to put towards paying off your holiday debt.<\/p>\n You can sell lots of things online.<\/p>\n Here are a few places that are great for selling stuff<\/a> in general and for local sales:<\/p>\n Here are a some places where you can sell old DVDs:<\/p>\n Here are some great sites for selling your clothes:<\/p>\n Here are some awesome places to sell used electronics:<\/p>\n Here are some great sites<\/a> for selling books:<\/p>\n Work as a data entry clerk, and you could earn anywhere from $9 to $17 an hour!<\/a> The average income for a data entry clerk is $12 an hour.<\/p>\n This gig is pretty simple and can be done from home!<\/p>\n Just enter data into documents, spreadsheets, databases, etc.<\/p>\n Here are some places you can find data entry work:<\/p>\n Amazon will pay you to deliver its packages. You can take on as few or as many deliveries as you want to. Pay ranges from $18 to $25 an hour.<\/p>\n I did a full review of being an Amazon Flex driver, which you can read here<\/a>.<\/p>\n Shipt will pay you to pick up and deliver groceries<\/a>. You earn up to $22 an hour!<\/p>\n This is another gig where you can take on as little or as much work as you want to.<\/p>\n Many blog owners are looking for articles to add to their site. So, they accept submission from guest writers.<\/p>\n There are blogs about everything from parenting to travel that will pay you to write for them.<\/p>\n Here are some examples:<\/p>\n You could get paid to tutor people online. You can make money teaching students about a range of topics.<\/p>\n This is another at-home gig making it a flexible way to earn cash. Online tutors<\/a> earn $19 an hour on average, but they can earn anywhere from $15 to $20 or more per hour.<\/p>\n Here are some places to find work as an online tutor:<\/p>\n Make money giving people lifts as an Uber or Lyft driver. You can pick up work when you want to, making this an easy gig to fit into your schedule.<\/p>\n Pay varies depending on which company you\u2019re driving for, and other factors, like how many rides you give, and where you live.<\/p>\n Uber drivers say they earn $15 an hour. Lyft drivers say they earn about $16 an hour, but they can make anywhere from $5 to $43 an hour.<\/p>\n Here\u2019s where to sign up:<\/p>\n If your car often sits in the driveway, consider renting it out. You could earn about $6,000 a year. How much money you\u2019ll make depends on the market value of your car, how many days of the month you rent it out, and what company you rent it out through.<\/p>\n Here are some places to rent out your car:<\/p>\n If you\u2019re a good typist, you could make money as a transcriptionist. All you need to do is listen to audio, then type or transcribe what you hear. Once you deliver the transcription to the client, you\u2019ll get paid.<\/p>\n Here are a few places where you can find transcription work:<\/p>\n Transcriptionists make $16 an hour on average. But, you can earn more or less than that, depending on the company you work with.<\/p>\n For example:<\/p>\n Assistant work isn\u2019t just for brick-and-mortar offices anymore.<\/p>\n Now, many people hire virtual assistants.<\/p>\n So, you could get paid to work as an assistant online.<\/p>\n Virtual assistants do all of the tasks that a regular assistant would do, like making phone calls, scheduling appointments, organizing meetings, and other administrative and organizational tasks.<\/p>\n The only difference is that they do all of their work online.<\/p>\n Here are a few websites where you can find virtual assistant work:<\/p>\n Virtual assistants earn anywhere from $10 to $29 an hour, and they earn an average of $15 an hour.<\/p>\n Freelance writers make money writing everything from blog posts to books.<\/p>\n With freelance writing, you can take on as much or as little work as you want to \u2013 making this a flexible gig.<\/p>\n You can write for content sites. With these, you apply to the site, and if you\u2019re approved, you can choose from a pool of articles.<\/p>\n Or you can work with private clients.<\/p>\n Private clients post jobs online that freelancers can apply to. If you apply to a job and are accepted, you work directly with the private client.<\/p>\n Here\u2019s where you can find freelance writing work:<\/p>\n Freelance writing income varies.<\/p>\n It can pay per word, per hour, or per project.<\/p>\n According to PayScale, Freelance writers say they earn $23 an hour, and that their income can range from $10 to $55 an hour.<\/p>\n For per word pay, you could earn as little as $0.001 a word or as much as $0.06 per word or more in some cases.<\/p>\n For per project pay, this can range anywhere from $5 per article, to $500 per article.<\/p>\n Ultimately, how much money you make from freelance writing will depend on the client or website that you work with.<\/p>\n Above, I mentioned that we have a lot of posts on making cash.<\/p>\n Here are some articles to read for even more ways to make money:<\/p>\n Okay, so now you should have started saving, and maybe you\u2019ve increased your income a bit.<\/p>\n Once you\u2019ve freed up some cash to put towards your debts, you can start paying them off.<\/p>\n Now, there are tons of different methods out there for tackling debt.<\/p>\n I\u2019m going to cover two of the main ones, which are:<\/p>\n Really, it all comes down to what suits you.<\/p>\n Let\u2019s take a look at these debt tackling methods and see which one best suits your needs.<\/p>\n With the Snowball method<\/a>, you write down all of your debts in order of smallest to largest.<\/p>\n Let\u2019s say you have $2,000 worth debt across three credit cards. Here\u2019s what your list would look like:<\/p>\n With the Snowball Method, you focus on paying off the smallest debt first.<\/p>\n This doesn\u2019t mean totally ignoring your other debts though.<\/p>\n You still must continue to make the minimum payment on your balances for all your debts.<\/p>\n You just focus on paying more to the first, smallest debt.<\/p>\n Once you\u2019ve paid off the smallest debt, then you move onto the next one.<\/p>\n You take the money you were using to pay the first debt and add it to the minimum payment towards the second debt.<\/p>\n So, to use the example above, once you\u2019d paid off the $200 debt, you\u2019d move onto paying off the $400 debt, and put that money you were paying on the first debt towards paying off that second debt.<\/p>\n This creates a snowball effect, hence the name!<\/p>\n Now, the Snowball Method is good for anyone who struggles to maintain motivation to pay off their debts.<\/p>\n It\u2019s all about those small wins. Paying off a $200 debt is much quicker, and it seems like much less of a challenge than paying off a $1,400 debt.<\/p>\n Paying off the $200 debt seems achievable.<\/p>\n Plus, once you\u2019ve paid off that first debt, you\u2019ll know that you\u2019re more than capable of paying off the rest of them.<\/p>\n Next up, we have the Avalanche Method<\/a>.<\/p>\n With this method, you focus on paying off the debts that have the highest interest rate first. In the long run, this saves you a lot of money on interest charges.<\/p>\n For this method, you need to list your debts in order of their APR. So, you list the one with the highest APR first, and the one with the lowest APR last.<\/p>\n You then use the money that you\u2019ve assigned to paying off your debts to pay off the debt that has the highest APR.<\/p>\n Once you\u2019ve paid off the first debt on your list, you take the money you used the pay that one, and put it towards the next one, and focus on paying that off \u2013 just like with the Snowball Method.<\/p>\n The Avalanche Method will save you more money in the long run than the Snowball Method will because you\u2019re getting rid of those high-interest debts first.<\/p>\n However, it can be tougher to maintain motivation with this method. With the Snowball Method, you get those little wins, and you can see progress quicker.<\/p>\n It really just depends on which method works best for you. If your main goal is to avoid paying tons of interest, then the Avalanche Method is for you.<\/p>\n If you feel like you need a little more motivation and like to feel as though you\u2019re making quick progress, then the Snowball Method will work better for you.<\/p>\n Above, I\u2019ve given you a five-step plan for paying off your holiday debts.<\/p>\n In this section, I\u2019m going to cover a few tips that\u2019ll help you on your journey to becoming debt-free!<\/p>\n I briefly mentioned above how important it is that you continue to make the minimum payments on all of your debts.,<\/p>\n Whether you chose the Snowball Method or the Avalanche Method, this is so important.<\/p>\n If you miss your minimum payments, it will not only hurt your credit score, but you\u2019ll likely incur late fees as well.<\/p>\n You don\u2019t want to owe even more money on your debts.<\/p>\n This means that if you are focusing on paying one debt first, don\u2019t forget to make the minimum payments on all of your other debts.<\/p>\n Avoiding late fees isn\u2019t the only reason you should keep up with minimum payments.<\/p>\n If you miss minimum payments:<\/p>\n That\u2019s why it\u2019s so important that you don\u2019t miss the minimum payments on any of your debts.<\/p>\n Mint is an app that allows you to:<\/p>\n Overall, it\u2019s a great tool for managing your finances, and it makes paying off debts much easier.<\/p>\n Avoid payday loans if you can.<\/p>\n They might seem tempting, but they only end up getting you in more debt.<\/p>\n According to Pew Research<\/a>, 12 million Americans take out payday loans each year, with many of them struggling to afford repayments.<\/p>\n The average payday loan requires a lump-sum repayment of $430.<\/p>\n This takes about 36% of the average borrower\u2019s gross paycheck, even though research shows that most borrowers can actually only afford no more than 5% while still covering their basic expenses.<\/p>\n This means that most borrowers have to renew or re-borrow the loans.<\/p>\n The CFPC found that 80% of payday loans are taken out within two weeks of repayment of a previous payday loan.<\/p>\n Basically, a payday loan might seem like an easy fix at the time, but in the long run, it costs you far more than its worth.<\/p>\n If you can, avoid payday loans.<\/p>\n One of the biggest reasons why people fail with paying off holiday debt is that they\u2019re not willing to be flexible.<\/p>\n Sometimes, you create a budget, allocate money to your debts, and you plan to pay them off.<\/p>\n Then, life happens.<\/p>\n Your car breaks, or you realize that the 50% cut your made to your grocery budget was just too much, and you\u2019re making yourself miserable.<\/p>\n Don\u2019t strain yourself too much.<\/p>\n Don\u2019t put too much pressure on yourself.<\/p>\n If you restrict yourself too much, you\u2019re likely to fail and give up altogether.<\/p>\n So, if something in your plan isn\u2019t working, adjust it, and try again.<\/p>\n Maybe you can cut your grocery budget by 25% instead of 50%.<\/p>\n Maybe, you\u2019ll have to put $400 towards your debts each month instead of $500.<\/p>\n Be willing to make changes to your plans.<\/p>\n Your financial plan shouldn\u2019t be set in stone.<\/p>\n It should help you, not make you feel restricted.<\/p>\n So, adjust and go again, and don\u2019t beat yourself up about it.<\/p>\n Okay, so I\u2019ve given you a five-step plan to follow.<\/p>\n Let\u2019s recap:<\/p>\nTake stock of your finances<\/span><\/h3>\n
Create a budget (but make sure you can stick to it)<\/span><\/h3>\n
Step 2: Consolidate or Transfer Your Debts<\/span><\/h2>\n
Consider a balance transfer<\/span><\/h3>\n
Consolidate your debt<\/span><\/h3>\n
Step 3: Save Money (Doable Tip Below!)<\/span><\/h2>\n
See where you could cut back without making yourself miserable<\/span><\/h3>\n
\n
Leave the credit cards at home<\/span><\/h3>\n
Delete your card details from online stores<\/span><\/h3>\n
Use coupons and cashback sites<\/span><\/h3>\n
Coupon sites<\/span><\/h4>\n
Cashback sites<\/span><\/h4>\n
Rebate apps<\/span><\/h4>\n
Browser extensions<\/span><\/h4>\n
Step 4: Increase Your Income (you can do it even if you work full-time!)<\/span><\/h2>\n
Sell stuff<\/span><\/h4>\n
Be a data entry clerk<\/span><\/h4>\n
Drive for Amazon Flex<\/span><\/h4>\n
Pick up and deliver groceries<\/span><\/h4>\n
Contribute to blogs<\/span><\/h4>\n
\n
Tutor people online<\/span><\/h4>\n
Drive for Lyft or Uber<\/span><\/h4>\n
Rent out your car<\/span><\/h4>\n
Do some transcription work<\/span><\/h4>\n
\n
Be a virtual assistant<\/span><\/h4>\n
Be a freelance writer<\/span><\/h4>\n
Read these posts for more ways to make money<\/span><\/h3>\n
Step 5: Choose a Method to Tackle Debt that Works for You<\/span><\/h2>\n
\n
The Snowball Method (good for keeping motivation high!)<\/span><\/h3>\n
\n
Why the Snowball Method?<\/span><\/h4>\n
The Avalanche Method (good for saving money on interest payments!)<\/span><\/h3>\n
Why the Avalanche Method?<\/span><\/h4>\n
So which method is better?<\/span><\/h3>\n
Tips for Paying Down Debt Accrued During Holiday<\/span><\/h2>\n
Make minimum payments on time for all of your debts<\/span><\/h3>\n
\n
Use Mint to make paying off debts easier<\/span><\/h3>\n
\n
\n
Avoid quick fixes like Payday Loans<\/span><\/h3>\n
One More Super Important Thing\u2026Be Flexible!<\/span><\/h2>\n
Key Takeaways<\/span><\/h2>\n