5 Step Process to Overcome the Fallout of Christmas Spending

by Fox Symes on February 4, 2013

It’s the beginning of a new year and we are all suffering the financial loss from the festive season that has just come to an end. Christmas time is arguably the most expensive time of the year and for some households it can become quite stressful once the joyful season is over. Some may be left with a huge dent in their credit card bills that have accumulated from countless spending throughout Christmas. The joy of Christmas is unavoidable and so to the spending that comes with it. We’ve provided a 5 step process to help get you back on track after the accumulation of last month’s spending.

1. Consolidate All of Your Different Credit Cards

If your debt has increased from the spending in December’s festivities, it may be worthwhile to consolidate all of your credit cards and any other existing debts or loans you may possess. The consolidation of your entire debt will allow you to manage a single monthly repayment at a lower interest rate. This may eventually save you thousands of dollars long term and provide more insight for your future finances. Rather than managing multiple accounts, debt consolidation will provide one simple account that becomes more affordable and controllable.

2. Time to Develop a Budget

There’s no better time to develop a new household budget than in the beginning of January. Commencing a new year after a huge financial expense from December indicates it the perfect time to get your expenses in order. The allocation of income to expenses allows you to determine how much discretionary income the household maintains. The left over amount will be money you can allocate elsewhere.

3. Minimise Unnecessary Spending

With the allocation of your new budget in place, you now know the amount of funds required for priority expenses. Now comes the time to avoid any unnecessary spending. Whatever activities you could avoid may save you more money. For example, if you normally dine out, it may be worthwhile eating at home and even taking packed lunch to work. Other unnecessary spending, such as buying personal things such as clothes, DVD’s or other such items should be avoided to allow you to get back on track with paying your debts.

4. Open a New Interest Saving Account

With the money you are saving from sticking to your budget and avoiding unnecessary spending, you should place into an interest earning savings account offered through your bank. Here you will be able to allocate any saved funds to a specific account that you know will be only for your debts. With the month’s interest accumulating, your savings will be growing (depending on the interest percentage rate and how much money is in the account) on their own.

5. Pay More Than The Minimal Required Monthly Amount

The consolidation of your credit cards and loans, setting a strict budget, avoiding unnecessary spending and opening a new interest savings account will allow you to accumulate more cash that you have saved from successfully carrying out these tasks. The amount that you have actually saved should be allocated to the consolidation loan or individual credit card bills, loans and debts.

Carrying out these tasks will ultimately allow you to pay off your debts faster than you would have originally anticipated. Come the next festive season, you will be more prepared and financially stable to enjoy Christmas than the previous year.

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