In December of 2020, retail stores were mostly closed, and consumers were relegated to online shopping. The mood of the holiday season wasn’t what anyone would describe as festive. That was tough, but it kept the holiday shopping bills low. Holiday debt wasn’t a big issue last January.
Fast forward to this most recent holiday season. Consumers are once again worried about paying off credit cards that were used to compensate for all that was missed out on during the pandemic. But this is a good thing as consumer spending is a sign of a recovering economy. However, this means consumers need help paying off their holiday debt. Here is some tips:
1. Make February a No-Spend Month
Use the month of February to abstain from spending money that doesn’t absolutely need to be spent. That means cutting out takeout food, impulse buys, and luxury purchases. That money should be used to pay off credit card bills from the holidays.
2. Create a Budget and Cut Expenses
The “no spend” month will help as will creating a budget. List all the expenses and then group them into “essential” and “non-essential.” They can also be categorized as “needs” and “wants.” The needs are essential. The wants are not. Eliminate them. Premium channels on cable and take-out food fall in this category.
3. Pick Up a Side Hustle
Side hustles became wildly popular during the pandemic when a large percentage of the population was unable to work on their regular jobs. Their hustles included money-making activities like dog walking, babysitting, and doing basic yardwork or handyman services. There are also side hustles online, like freelance writing and photography.
4. Find a Balance Transfer Credit Card
This is the time of year when credit card companies promote low or no-interest balance transfer cards. Average credit card interest rates are close to 20%, so switching holiday debt to one of these low-interest cards can be a money-saver. Do note the introductory offer. Most of those “low rates” expire at some point.
5. Start Saving for Next Year
This won’t help pay off last year’s holiday debt, but it can be useful for preventing debt from piling up this year. Use the techniques outlined here to cut down on spending, pay off credit cards, and save more.
The Bottom Line: Holiday Shopping is Expensive
By adjusting one’s spending habits now and putting a few dollars aside for next year, one can start a new holiday tradition, a tradition that won’t leave people deep in debt.
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Company Name: Credello
Contact Person: Carolina Darbelles
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Country: United States
Website: https://www.credello.com
