Tips to Pay Off Your Gift Purchases

The shopping is now a blurred memory, the gifts have been exchanged and the Happy New Year wishes bestowed on family, friends and colleagues. Brace yourself. Here come the bills. Don’t panic. Follow our tips to help you deal with the debts incurred during the gift giving season.

The first thought many consumers have after the holiday is “how am I going to pay off this new debt that I just took on”? Actually many of us already have the money to pay the statements that are on their way if we just do a little post-holiday planning.

Create a Budget. Create a budget and calculate what income you take in on a monthly basis. Then calculate what your fixedexpenses are. Most of us have something left over which we use for discretionary purchases and entertainment such as eating out and movies. Make a pledge to eliminate the things you can do without, even if temporarily and use that money to pay off the impending bills. Knowing that you do have extra funds to pay down the gift buying spree will give you some comfort and make you feel less overwhelmed.

Store the Credit Cards. Take your credit cards and storethem away. Forget you have them and start paying with cash. Don’t be tempted to use them for that discretionary purchase; remember, you took a pledge to do without them.

Review the Interest Rates on Your Statements. Plan to pay off your higher interest rate statements first. The higher interest ratecards will have balances that grow faster than the lower interest rate cards so pay them off progressively from highest to lowest. Also, if you have an available balance on a low interest card, transfer all or some of the balance from the higher interest cards to it.

Pay more than the Minimum. Always try to pay more than the minimum on your statement. You would be surprised how much faster you pay off your debt if you pay double or triple the minimum payment.

Sell Things You No Longer Need. Chances are you got some gifts that have replaced items that you no longer need. Sell it onEBay or Craig’s List. Look carefully at your inventory. Even if you didn’t get a replacement from aunt Jenny, we all have stuff that clutters our lives. Sell it and use the money to pay your debts.

Get Part-time Work. You don’t have to get a second job to accomplish this. See if you can find some work doing babysitting, dog walking, house sitting, snow shoveling, or serving for a local caterer. Any of these should give you enough extra income to pay off those purchases quickly.

 Start Saving for Next Year. The holidays always come at thesame time of the year. You can’t claim that it surprised you, so start saving early. As soon as you pay off this year’s debt, don’t resume your old habits of spending on entertainment and dining without putting some money away for next year’s gift giving. In fact, include a line item named “Holiday Gifts” on the budget you created at the beginning of this article and contribute to it each and every month.