It’s an easy thing to do: blow your entire month’s budget on holiday shopping, festive outfits, and dining out. Trust me: I’ve been there, too.
It wasn’t until I had graduated from college and landed my dream job at CNN that I got my first credit card. I know, I know…I was a bit behind the times. But I was raised in an immigrant family, where cash was queen and debt was just not okay. I made the move to Atlanta to start my new job, and suddenly there were all of these things that I thought I needed…or at least deserved. A new on-air wardrobe felt like a must (I was worth it, right?) as well as furniture and décor for my new apartment (after all, I had to be able to entertain all of my new friends in style!).
The trouble was, I hadn’t experienced the perils of interest before…and by that first holiday season, not only was I broke—I owed $5,000 on my credit card. Ouch. Those $25, $50, $100 purchases made here and there had snowballed into $100, $200, 500 with interest, faster than I ever would have imagined possible. Finding myself in debt for the first time in my life kept me up at night, and I resolved to start the new year afresh and debt-free…or at least, on my way to becoming debt free.
So how’d I do it? I’m not going to sugarcoat it: it’s not easy, and certainly not fun. But it can be done. Try this:
- Do double-time on your credit-card payments. Those credit card charges add up faster than you might think, and you may end up paying $50 for a pair of socks before you’re through paying off your cards. Of course, the best solution is to pay off the balance of your cards right when the statement arrives, but that isn’t always a viable option. Instead, try to curb enough of your other expenses (take from your “fun money” category first) to double-down on your payments each month until your holiday expenses are covered.
- Get an early start on your taxes. If you are one of the lucky taxpayers that actually receives a refund each year, do your taxes as soon as you receive all of your forms from employers, investment companies, and banks. Use the refund to pay down your debt, or, if you have a good handle on that already, use it to invest in next year’s holiday spending.
- Get a jump on spring-cleaning. I know your dirty secret: those boxes and bags full of perfectly good stuff that you have tucked away for a rainy day. Take advantage of a snowy day, instead and pull out the clothes, appliances, and household items that you haven’t used in a while, or don’t want anymore. You can auction them off on eBay, or post on your local CraigsList, and then use this “free-money” to pay down this year’s holiday expenses—or save for next year’s.
- Hit the sales. It might sound counterintuitive to go shopping after the holidays, but the only discounts deeper than those before the holidays are those directly after. Score some gifts for next year—plus wrapping paper, holiday cards, and ornaments—at 60-75% off. This time next year you’ll be glad you did! (One caveat: remember that just because it’s on sale doesn’t mean it’s cheap).
- Take an entertainment time-out. If you’re like me, you probably saw enough holiday movies, concerts, and recitals to last until next year—not to mention the dinner and bar tabs. In order to raise some cash to pay off your cards, put a moratorium on going out to dinner and movies, at least through February. Take advantage of the downtime to enjoy all of the gifts you were given; curl up with a new book, or play outside in that cozy new jacket.
For more great tips from Nicole visit her website and pick up her upcoming book Ritch Bitch which you can pre-order right now on Amazon!