GC: Bounce back from holiday debt
Jan. 26, 2012 at 10:02 a.m.
Updated Jan. 25, 2012 at 7:26 p.m.
The holidays bring out the gift-giving in everyone. We buy gifts for co-workers, the neighbors, the in-laws and the kids. When the presents are open, the surprise is always priceless, but when the bills start trickling in, the finance charges and late fees aren't so cute.
Melissa Goonan, market development representative with GreenPath Debt Solutions, said most people will make New Year's resolutions to pay bills or get out of debt. Whether it's a new resolution, or not, it's something we can all relate to after holiday spending.
Here are some tips to help manage debt and get on track to pay bills off.
1. List short- and long-term goals
Goonan said setting long-term goals is a good place to start because it will help put the debtor on track. Putting the goals into writing is a good way to follow those goals.
"Jotting down those goals, might be the encouragement they need to stick to a budget or spending plan," she said.
She added that it's a good idea to make it specific and measurable so that the debtor can keep track of progress.
2. Keep track of all your expenses
Holding onto receipts from holiday or everyday spending will help the debtor know how much is spent. Looking at the charges to make sure everything is accurate may also protect against fraud and identity theft.
"It's really easy to make mistakes," she explained. "If you take advantage of a big sale, make sure you pay for what you get."
3. Work as a team
The outflow of money may affect more than just the debtor; it's possible the entire household may have to pinch pennies to work toward paying off bills.
"Introduce the idea to the kids, as a family," she suggested. "Doing that can provide buy-in, which may make it easier."
She also advised that carrying around a small notebook for tracking expenses will help get a clear picture of where money is going.
4. Decide what it is that you want to do
Choosing a clear, final point can help keep focus on the end-goal in mind. It's easy to stray from the short- or long-term goals if they are not stated concretely.
"In picking something like paying off your Christmas debt, you want to give yourself enough time," she said.
This goes back to setting goals - all these tips can help people take control of their debt and make sure that they can pay it off.
"Make it something small and manageable, so that you can tackle it, and you don't get overwhelmed," she said.