Today is a new day and we are finally emerging from the madness of the Good End (unless some continue fishing for the latest sales). But now, after saying yes to a few offers, the period of excitement and adrenaline becomes a period of worry and stress. So it is natural that you wonder how to settle your post-Good End debt.
First of all planning
First, we want to think that you paid attention to some of our tips to get ready for the Good End. If you made your list, you compared prices and asked your budget for permission, then surely paying off your debt has you without worry. Without a doubt, you are on the right track when using your credit card having the ability to pay and commitment to settle it.
However, if there were some extra purchases, you forgot your budget or abused your credit card, it is time to face the debts that were born in the cheapest weekend of the year .
Strategies to settle your debt after the Good End
1. Keep the numbers clear
Any goal should be as clear as possible to achieve it and that includes paying off your debt. How much did you spend? Do you have the budget to solve it? Did you buy one or more things? Did you put it months without interest? Did you already have other debts?
All this you have to have written down in a way that is clear to you. For that you can find an application that helps you keep track of your financial goals from your cell phone, although you can always use the reliable and traditional Excel file or your calendar.
2. Start paying your most expensive debt
Remember that not all debts are equal. Not only for the amount you owe but for the interests that accompany them. The easiest way to identify which debt is the most expensive is to review the Total Annual Cost, better known as CAT.
The percentage of the CAT includes the aspects that make your debt more expensive, such as: the interest rate, the annuity, the commissions or any other element that determines how much the credit you used will cost you.
3. Pay more than the minimum
Paying the minimum is like aunt criticona, you have to avoid it at all costs. When you pay the minimum you are letting more and more interest accrue, that is to say that you are making your debt more expensive.
And, to top it off, most of that payment is mainly going to pay the same interest, commissions and VAT and very little to pay off your debt. So not only do you make your debt more expensive, but you also extend the time it will take to pay it.
4. Make adjustments to your budget
If your reasoning during the Good End was to pay in advance what you had already planned to spend, then do not deviate and continue to allocate that percentage of your budget to settle your debt. Now, if these expenses were “unexpected” it would be best to review your budget to make adjustments.
Maybe in your monthly budget you have a percentage destined for expenses such as entertainment and leisure. In that case, if you decided to buy a television, it makes sense that you now use that budget to pay for your new medium to watch Netflix.
5. Look for alternatives to settle your debt
Today, thanks to the internet, applying for a loan to pay off debts is not only quite accessible but also offers several advantages. Among them, online loans usually offer better conditions in terms of interest and payment terms.
In addition, refinancing your debt with these alternatives helps you with your credit history in case you had a negative rating.
6. Debt consolidation applies
Answering the questions about whether you bought several things in the Good End or if you already had other debts in line, debt consolidation may be the best solution for you. When you collect all your debts into one, it is much easier to manage them since you only have to focus on a single amount, a CAT, a term and a payment date.
Whether you have loaded your purchases to the same card or distributed them, when requesting a loan to consolidate debts, you return part of your financial peace of mind.
7. Generate extra income
Financing your debt does not mean that it has disappeared, you still have to pay it off. So, if the adjustments in your budget do not give you more, it is time to consider an extra income:
- Identify your skills and talents to develop a project as a freelancer
- Sell your products online
- Looking for a temporary job on weekends
- Support a friend or relative in your business in your free time
- Ask for extra hours at your job (but make sure they get paid)
8. Stop growing your debt
This strategy will seem obvious but the trap is to rule it out. Do not assume that you can control “a little more” of debts, better take conscious actions to avoid falling into the same. You can temporarily block your card or set a limit amount to avoid temptations. Or flatly hide all your cards until you manage to settle your debt.
You have the control
Even if you feel that you passed your hand in the Good End, it is not necessary that you continue to recriminate yourself for those decisions. The best thing you can do is recognize that you have the power and tools to face and settle your debt. So calm down, breathe and commit to defining what your strategy will be before the end of the year.
Think about which or which of these points suits you best and give your debts a good end! ?