Tips to consolidate debt after the holidays

The holidays are behind us now…

The holidays are always a joyful time for everyone. It’s time to treat yourself and your loved ones with gifts and holiday dinners. We feel the urge to treat the ones closest to us, which can often times cause us to spend a little more than we anticipated. We rack up debt on our credit cards, which unfortunately we cannot ignore heading into the new year. Whatever we borrowed to fund our festivities, must be paid back with interest. Repaying those credit card purchases isn’t always an easy task with them carrying such a high level of interest. Fortunately, debt consolidation can help with paying off that debt after the holidays!

There is no one size fits all

Understanding our financial situation and our options is an important first step in paying off high-interest debt. When we look at clothing, there very rarely is such a thing as one size fits all. We all have different body types and physiques, which means certain pieces of clothing will fit and others won’t. The same goes for debt and paying it off. Each of us has a different amount of debt and factors that play into how we will be able to pay it off. To properly pay off our debt or pay it off in the most efficient way for ourselves, we must have accurate knowledge of our financial situation.

Factors like our credit score and our punctuality with meeting our payment deadlines will determine what options are available to you in terms of debt consolidation. The better our credit score and punctuality are, the better options we will have when looking at a debt consolidation loan. We are more likely to qualify for a lower interest rate on a loan to consolidate our debt, which can save us hundreds and pay it off faster!

Review and create a budget

While reviewing your financial situation and debt, take a look at any “luxury expenses.” What are some expenses or items that you splurge on and treat yourself to? If you treat yourself to a $6.50 Grande Almond Non-Fat Latte with Caramel Drizzle every morning, look at how you can save some money. Trade-in your luxury coffee for a more cost-effective one made at home. This way you still get your morning treat, but you’re also able to save some money. It may seem hard at first to give up your morning latte, but you’ll create more financial freedom for yourself once the debt has been paid off.

The money you save when cutting out luxury items can be used to pay off your holiday debt consolidation loan! The faster your debt is paid off, the more money you will end up saving by avoiding increasing interest fees. For more about creating, and keeping a budget, check out some tips to getting your budget in check here.

Avoid new debt

Paying off our current debt is no excuse to go and rack up some more. Avoid making any changes to your finances while you’re in the middle of paying off your holiday debt. Your main focus is to consolidate high-interest debt into a more manageable loan and pay it off as effectively as possible. By making a new purchase, you’ve essentially eliminated any progress you made towards paying off your debt. The only debt that should be in your vocabulary during this time is “debt consolidation”!

Debt after the holidays isn’t a life sentence…

Creating a budget doesn’t just mean that all available funds should be going straight to paying off our holiday debt. A portion of funds, even the smallest amount, should be put into our savings account. We always need a rainy-day fund for those unforeseen circumstances. If we put all our extra money into paying off our debt, we deprive ourselves of savings we may need later on. A good rule of thumb is to take your first hours’ worth of pay each day and put it into savings. This becomes a fixed amount in your budget each month that will go towards building up your savings. You’ve effectively eliminated your debt by doing this while also building up your savings.

Holiday debt should not be something you struggle to figure out on your own. Through the use of debt consolidation, you’ll be able to turn those high-interest credit card debts into one smaller interest loan. With the help of a mortgage professional, you’ll be able to find the perfect loan to help you tackle that debt after the holidays. Give us a call at Clinton Wilkins Mortgage Team to learn how debt consolidation can help you pay off your holiday debt. You can get in touch with us here.