Thanksgiving is long gone, and we’re a couple weeks into the new year which means that our holiday season is officially over. If you’re looking at your bank accounts and credit card statements and feeling a little queasy, don’t get too worried yet because you’re not the only one out there who may have spent too much over the holidays. Nobody wants to start 2015 in debt, but there are some easy tips that you can follow to quickly dig your way out of the hole you’re in and get ready for a financially healthy 2015. Read on to catch our top 4 tips to cure your financial holiday hangover.
1. Get honest about your whole financial picture
This is the first step to any successful plan to improve your financial future. Get a current copy of all your credit card bills and figure out what you owe on this high interest debt. The next step is to write down your monthly expenses that don’t change and you can’t live without. Things like your rent or mortgage, car payment, insurance, grocery budget, cell phone and etc. are static expenses. Subtract these expenses from your monthly after tax income and then you’re left with your expendable cash that you can use to pay down your debt. If it takes suffering a little bit by not doing everything you want for a little bit you’ll reap dividends by not paying the high interest rates you have on your credit cards.
2. Kill bad financial habits
You might be surprised at how many things you pay for that you don’t use or don’t need. Have a gym membership that you don’t use? What about your cable bill, do you really need HBO? Maybe you eat out for lunch every day instead of bringing lunch from home. Take a look at your credit card bills and you may be able to see trends where you spend money on things you don’t need. Try cutting cable for a month or two, bring lunch from home, skip happy hour after work next time and you’ll see extra money start to pile up you can use to pay off debt, and after your debt is paid you can use it to save for emergencies.
3. Earn more money
This may not apply to everybody, but there are plenty of ways to score extra income on the side after you come home from work each day. Plenty of people are happy to pay somebody else to run their errands for them and take care of their to do list. Check on craigslist or sign up with a website like taskrabbit to find easy jobs you can do in your spare time. The other easy way to make some quick cash is to declutter your life and sell some of your stuff. Every year I dig through my closet and sell a garbage bag worth of clothing to a second hand store and donate the rest for a tax write-off. You can do the same but think bigger and look for other items you don’t need and sell them on craigslist.
4. Use balance transfers
Take this bit of advice with a grain of salt and use it carefully. If you have a lot of credit card debt one of the easiest ways to save money right away is to apply for a new credit card with a 0% apr balance transfer deal. A quick search online will show you many offers that range between 6 months to over 2 years of paying no interest on your balances. Transferring your debt from a high interest card to a 0% card and then paying it aggressively can save you significant amounts of cash. However, be very careful about opening too many cards or falling behind on payments. Keep your goal of paying off debt in mind for your new cards and make big payments on time to get rid of your debt before the 0% promotion ends.