The holidays are usually very expensive but if you want to know how to get out of debt despite the end of the year expenses, this information is for you.
A healthy level of debt is one whose payments you can make each month without being in trouble to cover the necessary expenses you have and even without affecting your other expenses such as occasional outings or entertainment.
The first thing you have to do is understand your finances. If your debts are constantly increasing, it is because you are spending more than you can afford.
If it was just to cover year-end expenses, then avoid adding to these debts so they don’t get out of hand.
You must also understand how the loans you have work: how much interest are you paying each month? What you pay is going to cover interest or principal? When would you finish paying if you continue like this? What will be the total amount that will you pay for that debt?
Once you have analyzed your expenses and your debts, you have to make the necessary adjustments so that your expenses do not exceed your income and to start paying those debts that generate more interest.
In this case, it’s not just about cutting back on some unnecessary expenses, but about truly tightening your belt for a few months.
Cut all unnecessary expenses , meals away from home, outings, all ant expenses, travel and even think about canceling streaming services.
Remember that this will only be a couple of months and even if it is a sacrifice, it will pay off in time. Make accounts of how much to save in three or four months and the impact that that will have on your debts.
If with all that you are saving you still do not see the exit, then it is time to look for extra income.
Asking for an increase in work is one of the most viable options, because the increase in income will be permanent, if the situation does not allow it, then there are other alternatives.
Start by selling things that you have at home and no longer use, if you have clothes, movies, books or electronic devices collecting dust, it is time to take them out. You can sell them through social networks or online platforms, or have a garage sale at your home.
Avoid pawn shops, January is a month in which many tend to go to them. However, the amount they lend you is not always very high and the interest to be covered to recover your objects is.
In the process of analyzing your finances, it will be clear which are the ones that generate the most interest, usually credit or departmental cards.
Review the debts that you can consolidate or restructure , to reduce interest or eliminate commissions and account management.
Now, all the money you save on expenses or generate additional income should go directly to cover the loans or credits you have. This also applies if you have any left over from the Christmas bonus.
Make sure that any advance you make goes directly to capital, so you will be lowering the interest. Also make sure they don’t charge you fees or penalties for early payments.
The beginning of the year can be complicated because the euphoria of the Christmas holidays is over and that is when we begin to pay all the debts acquired in that season. However, if you follow these recommendations you will be able to get out of debt despite the expenses you have had at the end of the year.