It is easy to compromise debt consolidation plans when you get caught up in the holiday season. This is the reason why you need to approach the holidays with a solid financial plan. At least, if you want to enjoy the holidays despite your debt obligations and limited financial resources.
According to statistics, American households spent an average of $1,536 during the 2018 holidays. This is a huge amount and you need to be prepared for it.
When you are in debt, you cannot tell your creditors and lenders that you will miss out on your usual payment because you have to spend for the holidays. That is not an acceptable excuse. Unless it is a real financial hardship or a life or death situation, they will not allow you to stop payments nor will they let you lower your monthly dues.
But that does not mean you should sacrifice the overall holiday experience just because you are in the midst of completing your debt consolidation plans. Even if you are struggling to make ends meet, it is possible to enjoy the holiday season without compromising your debt payments.
Tips to stick to debt consolidation plans during the holidays
Here are important tips that will help you stick to the debt consolidation program that you started before the holiday season.
Prioritize your debt payments
While the holiday season is a momentous event, it should not be considered more important than your financial future. When you let your debt payments be compromised by your holiday spending, it will jeopardize the stability of your finances. Instead of being able to enjoy the money that you earned, the unpaid debts will restrict your financial resources. Enjoying the present is not bad but you should be cautious enough to ensure that the festivities of today will not affect your future life negatively. You may enjoy the holidays but the debt that will remain unpaid or the new credit that will accumulate can put a damper on your future. So keep your debt payments among your priorities for the holidays.
Revise your budget plan
You should also consider revising your budget to fit the new expenses that you will spend during the holidays. Since you will be prioritizing your debts, it has to be on top of the list of your budget plan. This will be alongside the other expenses that you cannot touch – like basic necessities and other fixed payments.
While you are analyzing your budget plan, you need to focus on the discretionary expenses. This is where you can save money. This refers to the expenses that do not have a fixed amount – like your food and grocery spending, entertainment expenses, etc. By being creative with your spending, you can lower your overall monthly expenses so you can make room for your holiday spending. This will keep your debt payments safe.
Save early for holiday spending
With the holidays coming very soon, it is important for you to start saving more money. Since you have checked out your discretionary spending, you can easily find areas where you can start saving for the holidays. You should start spending less on clothing – since there is a chance you can get those as gifts anyway. Or you can consider saving money on your daily lunch by taking advantage of leftovers. There are so many ways for you to save money on your expenses.
Ideally, you should have started doing this earlier. However, there is no better time than to start now. The shorter the time between now and the holidays, the more effort you should exert in saving money. The more money that you can set aside for your holiday spending, the lesser chance that you will be compromising your debt consolidation plans.
Increase your income
Apart from saving money, you need to look at the cash that is coming in. Look for ways to earn more. What sources of income can you tap into so you can save more money? You can ask your employer for more projects. Or you can ask them to assign more shifts to you. These will help you increase your salary without having to look for a second job.
However, if your career does not allow that, you can look for a side gig to help you earn more. There are online jobs that you can use to earn extra money. Outsourcing platforms like UpWork and Freelancer can help you find clients. Some projects can last for weeks while others will only last a couple of days. Any amount that you earn can be used for your holiday spending. If there is any extra, you can even use it to make a huge payment. This will help you complete your debt consolidation plans a lot faster.
Holiday spending tips while in the midst of debt consolidation
It might seem like a hard thing to do but you can enjoy and spend on the holidays even while you are paying off your consolidated debts. The key is to do it in such a way that it will not lead you into more debt. According to reports, 28% of holiday shoppers in 2018 were still paying for the credit they used in 2017. If they did not change their ways, they probably just added to that debt. It will not be surprising if this debt is not yet resolved until now.
With the 2019 holiday season around the corner, you want to make sure you will no longer add to this debt. It will not just keep your balance low, it will also keep you from ruining your debt consolidation plans.
Here are some tips that can help you spend for the holidays without compromising your personal finances.
Make a holiday spending list
Start by making a list of everything that you need to spend. Among the categories would include gifts, decorations, food, etc. Think back on what you spent last year and just copy what you did. This list will serve as your budget and guide. Assign a reasonable amount for every category and determine where you will get the funds to pay for it.
Be creative with your gifts
Some people spend so much money on gifts. The thing is, you can be as generous in gift-giving but you do not have to spend so much on it. When you spend less on the gifts, you get to secure the funds for your debt consolidation plans even further.
Try to come up with gifts that you can create yourself. Baking cookies and giving them to colleagues will allow you to personalize gifts and spend less money too. Or if you have sewing skills, you can also make use of that. Be creative with your options and schedule ahead so you have time to make each gift.
Recycle old holiday decorations
You should also avoid buying new ones. Stick to the decorations you used the previous year. You can just change the ribbons or other elements on the decors to make it look new. Or you can use them differently. For instance, you can place one decoration in a different part of the house. Using the same decoration is not too bad. If anything, certain pieces can remind you of what happened the previous years – and it can be a great topic during get-togethers and parties.
Focus on experiences
If you have a limited budget this holiday because of debt consolidation plans, that is okay. Focus on experiences rather than material gifts. Instead of buying expensive gifts for your kids, spend more time with them. They will remember the times you spent with them and not the gifts that may be broken in a couple of weeks. The same is true for relatives and friends.
In case you will be hosting a party, there is no need for you to spend on everything. Have your guests contribute something. That way, the cost of the event will not be too high.