Debt is one of the biggest problems families can struggle with. It has formed a huge part of expenditure when it comes to outgoings of a family's income. More and more, people are living beyond their means. But while this tends to be normal for everyday life, many of those families have the ambition and drive to pay off their debts. Sorry to mention the “c” word. But Christmas is fast approaching and is long known as a time for overspending. So why not get yourself in the best possible situation for the holiday season and take a good hard look at your finances. With that in mind, here are some easy steps you can take to help you reduce your debt in time for Christmas.
Find out your credit situation
A lot of the time we can be a little clueless as to where we stand when it comes to credit. Do you think you have a good credit rating? The chances are you won't know for sure. Which is why it’s good to check out websites like MyCreditMonitor. Knowing where you stand will help with your plan to reduce your debts. It can highlight where your creditors are, give you an indication on how much you owe and what your history is like. A lot of what you do next will be determined by your score. So get up to speed.
Make a plan
Once you know your credit score, you now need to devise a plan of how you pay things off. Try and look at where you owe the most money to, or which creditor is charging the most interest. These should be the priority to reduce first to cut down your overall spend.
Reduce the amount of interest you are paying
Reducing the interest you are paying is key. Many payments you send to credit or store cards will mostly be paying back the interest that has been charged. Doing very little to reducing the balance you owe. A great way to reduce the internet is to consider things like zero interest credit cards, where you can transfer balances. Or looking into consolidating the debts into one monthly payment. This could be done by a personal loan. What you don’t want to do is put yourself in a worse position. So only apply for these credit options if you have a decent credit rating, and you are not borrowing more than you need.
Think of options to boost your income
We could all do with a boost to our income. But wanting to reduce your debt is a great motivator to see how you can increase it. You could consider starting something from home. Perhaps selling unwanted items in your home on websites like eBay. Or even reducing your outgoings in general like reducing a TV package or switching to a better energy provider. Make sure all money earned or saved goes straight into the pot to reduce your debt.
Keep motivated and stay on track
Finally, it may be hard not to spend or easy to get off plan when it comes to reducing debt, but try and stay motivated. Remember the reasons why you are doing this and imagine the Christmas you could have, without getting into debt for it.
I hope this has inspired you to work on your finances over the next few months.