Paying off holiday debts

So you overspent over the Festive Season, and now you can't pay the bills?  You're not alone.  South African retailers had a bumper Festive Season, with sales reaching all-time highs, at a time when government and economists are telling us to take it easy with our spending.  What were we thinking???  How are we going to pay it all off, and face our usual expenses?  Here are some tips that we can all take to heart:

  1. Cut where you can

Is there anything you are buying that you can live without e.g. magazine subscriptions that you hardly ever read, or other memberships that you do not use as much as you should.  Cancel them, and use the money to pay off some of that debt.

  1. Economize

Cut out luxuries.  Take a packed lunch to work instead of buying food everyday.  Don't eat out but rather stay in and do your own cooking.  Take-aways and restaurants cost much more.  Hire a DVD instead of going to the movies.  Join the library instead of buying magazines and books.  Keep track of your savings and put it towards your holiday debt.

  1. Earn extra money

Take a second, part-time job to earn extra cash.  It doesn't have to be very lucrative, every little bit will help.  Extra work will also keep you busy, which will prevent you from spending more!  Dont be despondent about finding work.  When the economy is bad, it is easier to find part-time, temporary work, rather than full-time, permanent jobs.

  1. Don't ignore your bills

If you cannot pay the required amount on time, call the Credit Department of the store, and make arrangements for a credit plan that you can manage.  This will prevent you being blacklisted, which can lead to lots of problems the next time you try to buy something on credit.

  1. Pay cash...

..rather than with your credit cards.  When you pay cash, you literally see your money disappearing, and so you become more careful of how much of it you spend. 

  1. Return unused purchases

Not particularly attached to some of your presents or purchases?  Don't keep them.  Most of the bigger stores will take back unused items, in return for cash (to pay back your debt) or vouchers which you can use to buy something you really do need.

  1. Keep track of your progress

Write down where you started and keep a running balance as you pay it off.  This will motivate you to keep going.  You will feel very proud of your achievement as you see your balance diminish.

  1. And finally..

Don't buy more. At least until you have settled your debt, you should buy only what you need. Just because the stores have sales doesn't mean that you should indulge. You don't need it, and you can't afford it, so walk away now!

For more information on paying off your holiday debt, read these articles:

Update: 04 January 2011