With the holidays and 2014 behind us, it’s time to look to the year ahead and start working toward fulfilling the promises we made on New Year’s Eve, including making a budget and sticking to it. The first step for many folks in Boulder and along the Front Range to achieving that goal will be paying off their holiday debt.
If you are struggling with where to begin, don’t worry. There are more resources available to individuals looking to pay off their holiday debt than ever before. You may want to consider Fundamental Finance Academy’s one-on-one debt consulting service. Getting your priorities and paperwork in order can be exponentially easier with a fresh set of eyes. At Fundamental Finance Academy in Boulder, we’ve helped hundreds of individuals just like you create a plan for getting out of debt and executing it.
The first step to paying off your holiday debt is to find out exactly how much you owe and to whom. This will involve pulling together your credit card statements, checkbook, receipts and any other relevant information on your holiday spending. If you don’t know where you are starting from, it can be much more difficult to reach your goal.
Next, you’ll need to figure out what your assets are. How much are you pulling in every month? Do you have any uncashed holiday checks or bonus money from work? Once you have a clear picture of your outstanding holiday debts and your current assets you can begin to prioritize which debts to pay off first.
Once you’ve set aside enough money to pay for your essential costs (food, rent, transportation, and utilities) paying off the holiday spending you put on credit cards with a high APR should be your first priority. This type of debt costs more and more to repay the longer it is outstanding so you’ll want to take care of this first. If absolutely necessary, it may be possible to refinance your debt to lessen the impact of high APR’s, but your strategy will remain the same.
Pay what you can until you have the card with the highest APR paid off; then move onto the next one (don’t forget to continue making the minimum payments on all other cards as well so you don’t incur late fees). If you are diligent and disciplined about this practice you will have your holiday debt squared away in no time. If you need any help along the way, Fundament Finance Academy is here to answer your questions and help refine your strategy.
Make 2015 your year! We hope to hear from you soon.