Help! I Overspent on the Holidays!
It’s so easy to go overboard during the holidays. If you have kids, you want everything to be perfect for them. You want to build priceless memories, so spending any amount seems worth it. If you’re just getting started, you want to impress your family with how together you have things. Giving extravagant gifts to your family members seems like a great idea… until you’re faced with the grand total of all those costs in January.
However it happened, it’s important to approach this problem rationally. Constantly blaming yourself won’t fix the problem. The important part now is to right yourself financially. You can’t take back gifts and return them at this point. You have to deal with the situation that’s in front of you.
Fortunately, you’re not alone. Scott Credit Union is here to help. Check out these three ways you can patch up your finances and have things right before summer.
Budgeting advice
It can be very tempting to make only the minimum payments on the credit card you used to buy gifts, food, décor, and more. Unfortunately, it’s also the best way to ensure you’re in debt for all the holidays from here on out.
Making minimum payments on credit cards prolongs the length of time you’re in debt. It also makes the total amount you pay for your debt skyrocket. If your credit card has a 21% APR interest rate and you make only the minimum payments for the $10,000 you owe, you’ll end up paying a total of $16,874.47 before you’re rid of your debt.
What you need is an aggressive repayment plan. The question you should be asking yourself isn’t, “What’s the least I can pay on this debt?” Instead, identify the most you can afford to pay.
Making an extreme budget is usually not a good choice, but in this case, it’s essential until you get yourself out from under that holiday-fueled debt. Make some sacrifices and get ready to tighten your belt for a little while. Yeah, coming up with an extra $35 or $50 a month is tough, but it’s the easiest way to get things moving.
Refinancing major purchases
If you went overboard on one or two major purchases, like a car for a teen, it may not be credit card debt you need help overcoming. If you find that the monthly payment on your loan is more than you can handle, Scott Credit Union can help. We offer refinancing with great rates for vehicles and other large purchases. You may need to finance over a longer term to manage the monthly expenses, or you may just need to restructure to pay less now. Either way, you’ll find favorable and flexible terms with us.
Personal loans
Instead of making dozens of minimum payments, wouldn’t it be nice to focus your debt into one manageable plan? A debt consolidation loan can do just that. Best of all, it can save you money in the long run by lowering your interest rate and monthly payment commitment. Rather than paying a credit card APR, you can get the lower fixed rate on a personal loan.
Although collateral, or something to secure the loan, can help get you a lower interest rate, it isn’t necessary. All you need is some basic personal information and a willing partner, like Scott Credit Union. Our loan specialists can help you organize and simplify your payments, working toward a debt-free life.
More from the Banking Simplified Blog:
Hidden Holiday Costs
6 Ways to Keep Your Finances Intact This Holiday Season
Your Turn: Feeling buyer’s remorse after a big holiday spending spree? Let us know about it in the comments. If you’ve got a system to stay on budget, help your fellow members and share your wisdom!
