Customer
Blogs

01.23.2012 / How to Dig Yourself Out of Holiday Debt

It is the season to be jolly but are you one of the many Americans who went a bit overboard with gift giving this holiday season? Are you feeling the pinch as new credit card bills arrive in the mail each day? Follow these simple tips to pay off your holiday debt and be on your way to happy New Year.

"Follow these simple tips to pay off your holiday debt and be on your way to happy new year. "

Tip #1 - Create a Debt "Snowball"
Make a list of all your credit card accounts and determine the order in which you will pay them off. Whether you choose to pay off your account in the order of the lowest balance to the highest or the highest interest rate to the lowest, pick one and stick with the plan. By focusing on one balance at a time, you will benefit greatly as you see the balance reduced and paid off. Generally, it is recommended that you should pay off balances with higher interest rates first.

Tip #2 - Pay More than the Minimum Payment
Paying more than the minimum amount due will accelerate the speed at which you pay off your balance. You can also send more than one payment throughout the billing cycle. Consider making your payments online to eliminate the cost of checks and postage.

Tip #3 - Increase Your Cash Flow
If needed, work overtime at your current job or find a second job. If you don’t have time to work more hours consider increasing your income by selling unwanted items on auction sites. Have a yard sale and put any proceeds directly toward your debt. Similarly, if you receive a pay increase at your job, don't spend the extra money, put it towards your holiday debt until it is paid off. Just as you can "trim the fat"; by selling stuff you don't need, find ways to reduce or eliminate expenses and put the extra toward debt – eliminate extras from your cell phone bill, get rid of the fancy cable, purchase generic vs. name brands, cut out the gourmet coffee, and take your lunch to work instead of eating out.

Tip #4 - Start a Budget
Knowing exactly how much money you bring in each month and how much is needed to cover your bills, is the best way to understand how much money is left over to spend, save or apply towards your holiday debt balances. Create your budget and stick with it.

Do you have any debt reduction tips that have helped you? We want to hear from you!  Post a comment on www.facebook.com/fnbomaha.

Posted at 03:01 PM | Permalink
Post A Comment
 

The views expressed on this site may not reflect the views held by First National Bank of Omaha or any of its affiliates. The information provided through this website is not a substitute for any personal advice from a licensed professional. Use of any information or advice shall be solely at the user's own risk.

We welcome your comments. All comment submissions will be reviewed prior to being posted. If the comments are posted, they may be removed at any time. Comments will not be approved if they contain, include or involve any of the following: Obscenity; Crude, vulgar or offensive language and/or symbols; Gang signs or symbols; Derogatory characterizations of any ethnic, racial, sexual or religious groups, personal attacks of any kind towards others; Trespass or the violation of other people's rights or property; Illegal (e.g., discriminatory, harassing) or inappropriate activity, behavior or conduct (e.g., inflicting emotional distress); Any other content that is or could be considered inappropriate, unsuitable or offensive, or clearly "off-topic" as determined by First National Bank of Omaha. To protect your own privacy and the privacy of others, please do not include personally identifiable information such as Social Security Number, phone number or email address in the body of your comment.

For account related questions, please log in to First National Online at www.firstnational.com and use the secure email located in Contact Us.