Pine Advisors Shares Ways to Pay Off Holiday Debt

Pine Advisors Shares Ways to Pay Off Holiday Debt

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Holidays are here and that means it’s time to spend time with the people we love the most. It also means spending money on gifts, food and even trips. This can really add up and before you know it, you have a massive debt that can take a year to pay off.

If this situation sounds all too familiar, you’re not alone. With consumers spending over $1,000 on average this holiday season, it’s no surprise that many people simply can’t recoup the loss.

holiday debt

Fortunately, even if you find yourself in this situation, there are ways to make amend. Read on to learn some of the best ways to not only ward off overspending but how to pay off any debt you currently have.

Set a Budget

Probably the most important thing you can do is create a budget for holiday spending. While buying friends and family gifts is nice, paying too much or going to debt isn’t. And although no one wants to admit it, it’s easy to go overboard, especially during the holidays.

A good rule of thumb is to never spend more than you could pay in cash. Simply put, if can’t immediately pay the same amount in cash, you probably shouldn’t be buying it.

And while this may seem extreme and probably has a few people wondering what the purpose of having credit cards is for, the idea is that overspending is far too easy when paying with plastic. On the other hand, when you only use the same amount that you could pay in cash, it can cut your debt in half, if not more.

Make a List

Making a budget is only the first part of the equation. You should also make a concise list of what you want to spend, how much extra you can realistically spend and a definite cut-off figure, which will not cross. Seeing the figures on papers gives even the most spontaneous of shoppers a little more self-control, especially around the holidays.

Pay in Cash

One surefire way to avoid drowning in credit card debt is paying in cash. Contrary to paying with credit, once you have a set budget and only pay in cash, it’s easy to stay on track. In addition to not wanting to be embarrassed at checkout, paying in cash prevents last-minute splurges, often performed when paying with credit.

Use the Snowball Method

If you do go overboard this holiday season, one of the best ways to pay off debt is with the snowball method. Starting the smallest amount, you pay off each credit card in full before moving on the next.

Small successes usually make people want to continue, so they then are better equipped to pay off other cards as well. Once you get started, it’s almost addictive. Seeing debt diminish is empowering.

Try the Avalanche Method

Similar to the snowball method in reverse, you choose a card with the highest amount, and work towards paying it off. You then move on to the next highest card with the debt and work your way down.

Avoid Triggers

If you know there are certain situations or places that influence your spending habits, make a point to avoid them, or at least not have available funds for purchases. Impulse buying is similar to overeating. It happens without too much thought until afterward. Then, just like eating too much, people experience buyer’s remorse.

Transfer High Balances

Lenders may offer balance transfer cards where you can transfer your high balances onto one card and pay a lower rate over time.

If do you choose this option, make sure you pay off the debt on time or you may face high-interest rates on any remaining balance. Keep in mind that you do need to qualify, which means a credit score of at least 670.

Some companies may approve you if your score is a little lower, but it’s always a good idea to ask before applying. Pulling your credit can lower your score, so if your score is already low, you may want to wait to apply.

Work with a Credit Counselor

Even if you’re making all of your payments on time, you can still benefit from talking with a financial expert, like the ones at Pine Advisors. Together, you can create a solid plan to pay off your debt while keeping your credit in good standing.

Live with Less

Learning how to not spend doesn’t happen overnight. In fact, overspending can become a bad habit that’s hard to break. It seems like there’s always a reason as to why the purchase should be made. Although it might be tough, simply stop spending. Don’t take your credit cards with you when you go out.

Take out only enough cash for the items on your list and when you run out of cash, it’s time to go home. While this may seem a little extreme, you’ll be pleasantly surprised when you see how much money you’re saving, which can then be used to pay off holiday debt.

If you find yourself in over your head, Pine Advisors can help. The key is finding the right balance between paying down your debt and still being able to live life on your terms.

pay off holiday debt