4 Ways to Pay Off Holiday Debts
by Gary Foreman
There's no need to still be paying in June
Depending on which poll you use, Americans spent somewhere
between $700 and $1,100 on Christmas gifts last year. For a
good many shoppers, most of that spending went on their credit
cards. And, if history is any indicator, those bills won't be
paid off until May or June.
Suppose that you didn't want to be laboring under those
Christmas bills for months to come? Is there something that
can be done now to get them paid sooner? Yes, there are things
that you can do now to get those debts off your back. Let's
take a look at a couple of strategies you might want to
consider.
Insurance eats up a fair amount of the average family's
budget. Just home and auto insurance can run hundreds every
month. For an expensive item, very few people do any
comparison-shopping. If you haven't taken a look at your
insurance in the last year, you may be giving money away.
The Internet has made comparing insurance rates easier. There
are a number of sites that provide comparisons. You may also
want to talk with an agent. Insurance policies can be
confusing. Be careful before you make a switch. Make sure that
you're getting the coverage you need.
Don't forget to ask about your deductibles. That's the amount
that you have to pay before the insurance starts to pay for
the loss. Often raising a deductible to the next level can
make a big difference in your premium.
Finding cheaper insurance pays two dividends. First, you've
saved some money. Second, you haven't had to make any changes
to your lifestyle. Not bad!
Another place to look for money is your tax refund. The IRS
will send out checks to over 120 million taxpayers. The
average refund check will be $2,100. For many workers, their
tax refund is a once-a-year bonus.
Of course, the sooner you file, the quicker you'll get that
refund. Once you do file, you can find out the status of your
refund on the IRS's website at
<https://sa.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp>.
Unlike the insurance saving, your IRS refund really isn't
"found" money. It's actually your money. It's just that during
the year more money was withheld from each paycheck than was
needed to cover your taxes.
Unlike the insurance idea, it's just a one-time event. If you
want a refund next year, you'll need to overpay your
withholding this year again.
But suppose that you don't expect to get an IRS refund this
year. Then how about finding a few extra dollars every
workday?
If you work, you know that the cost of lunches adds up
quickly. A simple sandwich in the company cafeteria or local
fast food joint will cost you $4 or so by the time you include
fries and a drink. If you go out to a sit-down restaurant,
it's easy to spend $10 when you include a tip. Many people
work one hour per day just to pay for their lunch!
Many work places have a microwave oven available. That makes
leftovers the ideal lunch. Instead of throwing out that extra
serving from last night's dinner or letting it turn green in
the back of the refrigerator, take it to work for lunch!
If you have teenagers in the house, you might not have any
leftovers. Then you'll want to consider forming a lunch club.
Each member of the club takes a turn preparing lunch for the
whole group. You'll probably want between two and five
members. The group can decide whether it should be kept simple
like salad and sandwiches or if they want something more
substantial like casseroles. You'll spend less time and money
providing one meal for five people than buying lunch for
yourself every day.
No leftovers and you work alone? Don't give up. You can solve
the problem by increasing your income. One way to do that is
to ask your boss for a raise or for more hours.
If neither of those is possible, you might consider joining
the 7.5 million Americans who hold a second job. In fact, it
might do more than provide some extra income. You could learn
a new skill or even try out an entirely different career path.
A second job is less stressful when it's used to achieve a
short-term goal like paying off Christmas debts. It's easier
to handle the extra workload when you know there's an end in
sight.
There are a lot of other ways to whittle down those holiday
bills. Hold a garage sale, take some stuff to a consignment
shop or sell them on eBay. Look for ways to reduce expenses.
Cut your grocery spending. Make your own household cleaners.
Join a car pool.
So even if you overspent for the holidays, there's no need to
get down on yourself. Just figure out what will work best for
you and then get started!
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Gary Foreman is a former financial planner who currently
