Thoughts of debt undoubtedly creep into our heads as the holiday season approaches. How will we afford gifts? Will we be able to get our loved ones the things they really want? Thoughts of debt can add undue stress to an already hectic season. Fortunately, there are simple ways to relieve debt and get your life, and finances, back in order.
Cut Down on Frivolous Expenses
If you take a look around your house and a peak into your bank account, there will be items that you can remove from your budget. Do you have a coffee shop habit? Buy a travel cup and brew your joe at home. Do you really need 300 cable channels when you only watch one at a time? Cut back on your cable plan. Keep a journal or download an app to keep track of where your money is going. You’ll be amazed to find little things that you can cut from your budget!
Pay More Than the Minimum
With the new credit card laws that will be taking effect, your credit card statement will show you exactly how much you will be paying over time, and how long it will take to pay off your balance, if you make only the minimum payments. Consider paying $10 or $20 more than the minimum each month and you’ll not only reduce the total amount of interest you’ll pay, but reduce the time it will take you to pay the balance in full.
Take a Fresh Look at Insurance Policies
Many people purchase home and auto insurance and then neglect to re-examine their policies. If you signed your documents over a year ago, sit down with your policies and look at them again. Consider raising your deductibles and make sure you have the home coverage that you need, not what your insurance agent talked you into. Call your agent and ask about any discounts you may qualify for.
Purchase Order Financing
If you own a business and have a large order to place, consider purchase order financing. Rather than depleting your personal bank account, or taking out a loan from a traditional lender, consider managing your financial situation with this alternate method. As long as you are dealing with a reputable firm, you will have no issues in securing this type of loan.
Use Layaway
As the holiday shopping season gets closer, more stores are implementing layaway policies. Layaway can be a great alternative to using credit cards for your purchases, and there’s no rule that says those purchases must be holiday gifts. Use layaway for the new appliance that you need or for anything that you’re thinking of purchasing with a credit card. The small monthly payments will not only keep your bank account out of the red but, once your purchase is paid off, you won’t find yourself in debt come January.
Credit Counseling
Many people get so overwhelmed with debt that they simply choose to ignore it. This can only lead to more problems. If you find yourself buried in a mountain of debt, consult an expert credit counselor. These professionals can take a look at your income and your outgoing expenses and help you create a budget that works for you. They can also, at times, work out deals with your credit card companies to lower your payments or reduce your interest.
Being in debt can make you feel like you have nowhere to turn and getting out of debt can take months, if not years, to accomplish. Know that you aren’t alone and that there are people that can help you. Stop ignoring your debt and start working on a solution! You’ll soon find that your debt is under control and you’ve gotten your life back.
Author Bonnie Ashland is a financial advisor for medium to large companies. She suggests contacting purchase order financing companies before laying out capital or cash flow for large customer orders.