Are you freaked out over your Christmas credit card bills?
Did you just get your credit card statement for your Christmas spending? Is it more than you thought it would be because you overdid it? Americans spent 4% more on Christmas 2014 than the prior year which means even more regret in January 2015 than this time last year. But, what's done is done, no crying over spilled milk and all that. Today, we'll look at what you can do to deal with your budget-busting holiday debt.
#1 Consider a balance transfer
If you have debt on higher interest credit cards and room on lower interest cards, you should transfer as much of your balances to the lower interest cards as possible. Then prioritize paying off the high interest cards first to minimize the impact of interest. Once you pay off a card, stash it away so that it shows open and in good standing on your credit report, but you won't be tempted to run it up again.
#2 File your taxes now
If you know you'll be getting a tax refund, go ahead and file your taxes now instead of waiting for the deadline. Also, set up the refund for direct deposit to expedite payment. If you send it early, you'll beat the rush and get a speedy refund. You can use this to pay off your holiday debt and be done with it. Be sure you maximize your deductions and take all the credits you're allowed by law so you get the full refund you're entitled to.
#3 Adjust your withholdings
If you are getting a refund, that means you're overpaying on your taxes all year long. A $3,000 refund represents $250 a month that could be in your pocket instead of Uncle Sam's and could go a long way to helping pay down your 2014 holiday over-spend and cover your 2015 Christmas shopping. Adjust your withholdings using this IRS calculator and use the money wisely.
#4 Tighten your budget, not your fun
Do the usual thing of brown bagging and skipping Starbucks, but then also adjust your entertainment expenses without losing fun. Cut back to basic cable and rely on Netflix. Quit buying books and check out your new releases at the library. Get your family involved in free outdoor sports like hiking, biking or Geocaching. Eat in instead of out which will give you leftovers for work lunch.
#5 Create some cash
If you have any Christmas items you don't want and have a gift receipt, return them for cash if you can. If not, take a gift card and use it to cover expenses you would normally pay cash for and put that cash toward your holiday debt. Also see what stuff you have to host a garage sale, put on eBay or Craigslist and sell for some quick cash that you can put toward your holiday bills.
#6 Shop early and wisely for next Christmas
To avoid a debt hangover this time next year, make a strategic spending plan for Christmas 2015. Set a reasonable budget and then start shopping several months early and just stash things out of sight. Also, look for free layaway programs you can use to pay over a couple of months time without racking up interest charges from turning to credit cards.
If your credit card debt is simply too overwhelming to deal with and you've also got medical debts you can't pay plus late mortgage payments and other money woes, you may need a more serious solution. Contact the law offices of John T Orcutt for a free consultation at one of our convenient North Carolina locations.