So, you now have a debt hangover after overspending this Christmas season. A financial hangover has a longer lasting effect than the one caused by alcohol. It is very easy to overspend over the festive season. Have you ever thought to yourself “I will deal with it later”, just before a large expense? With credit options easily available, it is quick and easy to spend money that you don’t have.
Did you overspend this Festive Season?
Whether you are buying food, presents, drinks, clothing or a new TV, it is easy to take the item bow and pay later. A much better approach would be to buy these items with cash. Save up over a few months until you can afford to buy the item. If you cannot afford the item now, should you really be buying it? If you do purchase on credit, the item will end up costing you more due to interest and fees. A credit card makes your life easier, but it is easy to get caught up. Think before you swipe!
What should I do if I have a debt hangover?
If it’s too late and you have maxed out your credit card or taken out loans, here’s is what you need to do:
- Pay your instalments on time and in full
- Manage your budget
- Don’t take out any more debt if you don’t have to
- Pay off debt as quickly as possible
Remember, there are two types of debt, good and bad. Be careful to not take out too much bad debt. If you think you may be blacklisted, speak to a debt counsellor to find out why. Let 2018 be the year of the budget. Budgets are easy to set up, but difficult to track. It takes discipline and commitment to track your budget and make a summary at month end. Without doing this, how will you know if you achieved your goals and find out where you over- or under-spent?
Create financial goals for 2018
Set up a savings account (perhaps a tax-free savings account) for the new year. Commit a certain amount each month and save as soon as your salary comes in. This is called “Paying yourself first” and is a great financial principle to live by. For any other help or advice, contact Vantage Debt Management for free assistance.