Last year, the average shopper racked up about $1,000 in holiday spending, while about 15 percent of the public still hadn’t paid off debt from 2017 when this holiday season started.
Mark Ede with Naperville Financial says tackling your holiday debt can be done in four simple steps: believe in the budget, start studying, get laser-focused, and change your mindset.
“So it all starts out with a budget,” said Ede. “Ideally speaking you want to have enough to pay all of your bills but also have enough to start chopping away at some of the long term debt that you have, whether that’s credit cards, car payments what have you.”
From there, Ede advises to figure out how your credit cards work, and what the minimum payments, due dates, and interest rates are.
With that big picture understood, you can get laser-focused on paying your debt in one of two ways.
“There’s either the avalanche approach or the snowball approach,” he said. “With the avalanche approach you’re basically going after the highest interest rate first. You’re knocking that one out and then you move along. With the snowball approach you look for the lowest debt first, pay that off, and it creates a snowball effect with how much you have left over each month, and then you slowly start chipping away until it’s all taken care of.”
Then Ede says to shift your mindset from spending to saving.
“If this holiday season set you back another $1,000 you need to start thinking of saving for 2019’s holidays now, so that you don’t keep putting yourself further and further into the hole,” added Ede.
Naperville Financial has budget worksheets and other information on saving on its website.
Naperville News 17’s Christine Lena reports.
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