5 Easy Ways To Pay Off Debt Before the Holiday Season
Holidays are stressful. There are demands to attend events and give gifts, all while remaining merry. And then there is the strain on your wallet. On average, Americans plan to spend $932 on gifts this year. This is up about $100 from last year. One of the main reasons for this is the inflation we’ve seen in the past year.
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To cope with rising prices, many Americans took on debt during 2022. More than 64 million Americans have credit card debt. Even outside of inflation, the holidays in general cause families to incur debt. Last year, 36% of Americans took on debt during the holidays, which rounded out to be about $1,249 on average.
If you overspend on gifts, the results can be devastating to your financial well-being. That is especially true if you already have accumulated years of debt. However, there is hope. Experts weighed in to tell us the best ways to pay off your debt fast before the holidays.
Look Into a Balance Transfer Card
If you’re carrying a lot of credit card debt, one way to make it easier to pay off is to get a balance transfer card. Tommy Gallagher, Founder of Top Mobile Banks, said that the holidays are actually an opportune time to switch your balance onto one of these cards. “Interest rates on credit cards tend to go up around this time of year, so getting a card with low or no interest payments can save money each month while also paying off your debt faster,” Gallagher said.
However, Chief Revenue Officer at Achieve, Sean Fox, advised to make sure you can pay off your debt before the introductory rate on your balance transfer card expires, otherwise you’ll be stuck with more debt. “Do your calculations carefully so you know that the balance-transfer fees will not be more than the savings you’ll reap from doing the transfer,” Fox said.
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Reduce Unnecessary Spending
This might seem obvious, but really tap into your savings skills right before the holidays hit. Gallagher said the best way to do this is by creating a solid budget. “By breaking down your expenses into specific categories, you can more easily identify where you are overspending and make changes to save money” Gallagher said.
Annette Harris, Financial Fitness Coach at Harris Financial Coaching, said that one of the key areas you can cut spending is eating out. Doing this frequently can be costing you quite a bit. “You could spend upwards of $50 each night on takeout for a family of four. Eating out at least four nights a week can cost you over $800 a month. The key is to shop for your groceries and to cook your meals at home. You’ll find that you have meals that can last your family for multiple nights. The money you retain from cooking at home can help you pay off your debt before the holidays.”
Consider a Personal Loan
If your debt is overwhelming and you’re spending a lot on interest, a loan might be worth looking into. Fox says that a loan can sometimes make life a little easier when it comes to your finances. “If you can qualify for a loan that carries a rate lower than on your credit cards, you can take the funds from the loan, pay off your higher-interest debt, then just have one payment to make (the personal loan) with a lower payment,” Fox said. He said to keep in mind that interest rates are based on your credit, and can vary quite a bit.
You don’t have to go through a creditor to get a loan. Although it might take a lot of courage to ask, think about asking a friend or family member you can trust. Though it can be humbling, a friend will most likely not charge interest, which can save you a lot of money in the long run.
Get a Second Job
The holidays are a great time to pick up some extra work, as stores are hiring seasonal employees. This can be a great method to earn some extra cash to pay off your debt. Fox advised that, if you can, try to get work that appeals to you, or might offer you a discount you can use to buy gifts. “Get creative and see where your interests and possibilities fall: tutoring for kids needing to pass exams, babysitting, pet-sitting, dog-walking or yard work. [Additionally], many companies that have customer service operations are happy to hire seasonal remote workers.”
Sell Your Stuff
There are so many websites now where you can list your belongings that you don’t use anymore and make cash quickly. Scott Lieberman, Founder of TouchdownMoney.com, said to look first at sites like Craigslist, Facebook Marketplace, and OfferUp. “When I needed money to pay debts, I sold my old trumpet that I hadn’t trumpeted in years. My high school concert band teacher may have been upset, but I was happy for the quick cash,” Lieberman said.
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Ashley Redmond contributed to the reporting for this article.