Have you made finances your priority in 2011?
Lots of people overspend at Christmas and face the unpleasant task of having to pay off the credit card bills in January. Some people make resolutions to lower their debt or increase their savings every New Year.
Whatever your situation we have easy tips that can help you with your efforts to get financially fit!
Tip#1 - Create a plan:
Any attention we pay to our finances in January is usually directed to paying off the credit card bills from Christmas. For some of us, that will be all the financial planning we do!
While paying off credit card bills will be high on your priority list, you would be better off taking the time to create an overall plan for your money this year. Too often people focus on paying off last year’s debt but don’t plan to save anything for this year’s expenses.
By creating an overall plan, you can incorporate goals like paying off credit cards into your overall spending and saving strategies while at the same time planning a “debt free” holiday for next year.
Our coaching program has a unique seven step process that will help you create a plan for yourself for a stress free financial year. Call for your free consultation.
Tip # 2- Consolidate to a lower interest product:
If you are carrying debts on several credit cards, and cannot pay the entire balance in January, transfer the debts to an unsecured personal line of credit or a lower interest card. If you have to carry balances, make sure you are paying the lowest interest possible until you can pay it off.
Tip 3#: Pay off any high interest debt:
Make paying off high interest debt a priority. If you are carrying a balance on several credit cards, there are two methods of attack.
One is to make the minimum payments to all but the one with the smallest balance. Put as much money as you can toward the smallest debt. Once this is paid off, you can direct the money you have been paying to the smallest balance and direct it to the card with the next smallest balance. That way you have the early gratification of seeing your debts being paid off.
The second is to make the minimum payments to all but the card with the highest interest. Put all your extra money toward the card charging the highest interest rate. Once this debt has been paid off, direct what you have been paying to the card with the next highest interest rate. If the interest rates are the same on two or more cards, choose the card with the highest balance. While you do not get the immediate gratification of seeing your small debts paid first, this method ensures you pay the least amount of interest possible on your debt.
Consult a professional:
Denied Credit? Let’s face it, if a financial institution whose purpose is to make money by lending you money, tells you they will not lend to you, LISTEN to them. Treat that as a warning flag that your finances are in poor shape. Don’t let your desperation drive you to make a decision that ultimately leaves you worse off than before. Consult with a professional counsellor who can outline the options available to you and help you make an informed decision.
If you find yourself contemplating a loan to pay off your debt, make sure you can get a loan that lowers the interest on the debt you have. If your credit cards are maxed out and you find yourself unable to manage the payments consult an unbiased professional like a financial counsellor, who can give you options about how to manage your debt. Many people get themselves into a worse financial situation by consolidating their debt into a high interest loan.