Everyone loves the holiday season that runs from Thanksgiving through Christmas and New Year’s Day, but no one enjoys the sticker shock that follows. While not everyone overdoes the spending, millions of consumers find themselves in a debt bind by late January. The situation is particularly challenging for those who relied on the deceptively easy availability of credit cards with sky-high interest rates. What’s the most sensible solution?
Actually, there are numerous tactics for fending off all the financial problems that accompany the typical holiday buying sprees, parties, and gift giving.
For many working adults, the ideal strategy is to take out a personal loan and pay off all that high-interest card debt. Then, remember to check your credit scores with the three major bureaus, with the aim of correcting errors and find out where you stand.
Besides adjusting the monthly budget and getting professional advice about how to better structure your financial affairs, consider opening a holiday savings account at a local bank or credit union. Explore the following details about dealing with holiday spending.
Take Out A Personal Loan
Taking out a personal loan to rearrange your finances is a powerful tool, and many consumers use this tactic with great success. Applying loan proceeds toward high-interest debt is a commonsense solution that can save money and get you back on track by the time February rolls around.
Remember to shop around for the lowest loan rates and for terms you can live with. It’s often the case that those who banish credit card balances via a personal loan save a significant amount of money over the course of the following year.
Check All Three Credit Scores
By law, every consumer gets one free credit report from each of the three bureaus per year. It’s imperative to obtain and carefully read the reports. Use an online translation website to decipher the lingo if you need help understanding the odd wording of bureau language. The first task is to find errors. They’re more common than you might expect.
Contact the agency directly via email or postal mail and let provide all the documentation to show that a specific listing is erroneous. Next, make a plan to track your scores every month. There are several platforms that offer low-cost monthly score reports.
Adjust The Monthly Budget
Be willing to make a few temporary and maybe one or two permanent sacrifices when scanning your budget. Focus on recurring expenses like groceries, fuel purchases, eating out, utilities, etc.
For the majority of working adults, it’s possible to save by eliminating fast food, convenience store purchases, and other forms of unnecessary spending. If you need extra help, consider working with a consumer counselor.Their rates are reasonable, and you can usually develop a commonsense budget with their assistance in under an hour.
Start A Holiday Fund
Be proactive and avoid overspending next year by setting up a holiday account with your favorite financial institution. Many are time lock type accounts that pay interest, like CDs. They’re an excellent way to prepare for the upcoming year and avoid falling into the credit card trap two years in a row.