After Holiday Spending, There Will be Financial Mending

Tips From Consolidated Credit For Better Money Management in 2010

Holiday overspending doesn’t only cause bad surprises in January when the bills come; the stress of dealing with those bills often can lead to depression and anxiety. It is not how much a person owes, but how the debt affects them.

Somebody could be $1,000 in debt and that could be a major debt to them. People should seek help when they start feeling distressed. Whether a person needs to budget his way out of a $500 or $50,000 debt, there are ways to do it.

Consolidated Credit’s top tips for dealing with money in 2010:

  • Get a handle on your spending. Most people spend thousands of dollars without much thought to what they’re buying. Write down everything you spend for a month, cut back on things you don’t need, and start saving the money left over or use it to reduce your debt more quickly.
  • Read all credit card statements and mail you receive from your credit card issuers. Check if your creditors are changing your annual percentage rate (APR) to a variable rate or if they are raising your rate. The Credit Card Accountability Responsibility and Disclosure Act of 2009 will be in full swing come mid-February and banks are changing terms on many credit cards. If you are unsure about your terms, pick up the phone and call your credit card company to find out if there are any changes coming.
  • Pay off your highest-rate debts first. The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.
  • Watch where you borrow. It may be convenient to borrow against your home or your 401(k) to pay off debt, but it can be dangerous. You could lose your home or fall short of your investing goals at retirement.
  • Don’t be so quick to pay down your mortgage. Don’t pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan.
  • Get help as soon as you need it. If you have more debt than you can manage, get help before your debt breaks your back. There are reputable debt-counseling agencies that may be able to consolidate your debt and assist you in better managing your finances. Consolidated Credit conducts free budgeting analyses and dispenses free advice on a daily basis. If someone needs help they can speak with a counselor with no obligation or visit ConsolidatedCredit.org.