After Christmas Debt: Paying Now for Overspending During the Holidays-Getting Out of Debt

Did you really have to buy the flat screen TV for Christmas? Whether it was a gift for someone else or yourself that put you over the edge financially, now’s the time to reign in your spending and start saving:

  • Open a Christmas Club account. Start putting money away now for the 2008 holiday season. If you set aside a certain amount each month and have it automatically transferred into your Christmas Club account, you won’t even know it’s missing. Come November first, you’ll have a tidy sum to spend for holiday presents.
  • Negotiate your credit card interest rate. A lot of people don’t realize, you can call up your credit card company and ask them for a lower rate. You might be surprised at how low they’ll go, especially if your credit is good. Nobody likes to lose business.
  • Shop around for a different credit card. Look for cards that pay cash back. If you haven’t shopped around for awhile, you’ll be amazed at the offer out there. From airline miles to gift cards and discount travel, companies will try and lure in potential customers with loads of rebates. Just remember, deals go away just as fast as they appear. So watch your card. If the five percent cash back you were getting suddenly disappears, start shopping for a new card now.
  • Open a Certificate of Deposit. If you have at least $1,000 in a savings or checking account, transfer it to a CD for a much better interest rate. Check out online banks as well as brick and mortar institutions for the best deal.
  • Renegotiate your auto loan. Check the terms of your contract. But often, you can contact your lender, and if your credit is good, you may qualify for a lower rate.
  • Cut out small expenses. Those are the ones that really add up. You may be doing a great job tracking your large expenditures, but those small-ticket items multiply fast. Instead of going to Starbucks, make coffee at home from beans you buy in bulk at warehouse clubs. But you miss that double foam latte with an extra shot? Make it at home. Cappuccino makers are cheaper than ever. Buy one on sale with the money left-over from returned Christmas gifts. You can have fun making specialty coffee drinks with family and friends, and you may save at least five dollars a day in the process!
  • Take public transportation. You’ll help yourself and the environment. Even if your community only offers a bus system, check it out! Employers are starting to offer financial incentives for employees who take public transportation to work. You can relax on a bus or a train and get caught up on reading instead of seething at the other drivers behind the wheel. If you track the money you save on gas, you might be surprised at how much you save.

Finally, work toward paying the entire balance on your credit card. Paying off your bills is like giving yourself an extra 18 to 30 percent interest every month!