5 Tips to Kick-off the New Year Debt Free

It’s the most wonderful time of the year! Just think of it…the holiday shopping, time with family and friends and ringing in the New Year. As easy as it is to get wrapped-up in the holiday spirit, the price tag to go along with it can make for a rude awakening once the glitter settles as the bills start coming due.

Last year on For The Family we shared why we celebrate Christmas debt-free to encourage others not to fall into the trap of commercialism. In that same spirit of being debt-free, today we are sharing are 6 tips to kick-off the New Year debt free.

1. Stick to your Holiday Spending Budget

Enjoying the hustle and bustle of the season as you shop for friends and family is a lot of fun, but can also wreck havoc on your checking account if not carefully monitored. Before you begin your holiday shopping, make a list of those who you are buying for and a spending limit for each one. Sticking to it when shopping will help to ensure that you haven’t over-extended yourself, financially, and will make for a much happier you when you don’t have to worry about paying lofty bills after the new year.

2. Only Spend what you Have

As you prepare for the holidays, keep an eye on the amount that you’re spending on the joys of the season. Make sure that you only spend money that you have available. When using a debit card, keep good records in your checkbook (or accounting software) to be sure that the holiday season isn’t putting you into debt. If using your credit card for payment, make sure that you can pay it off as soon as the bill comes due. If you are unable to pay a credit card as cash at the end of the month, we would highly advise you not have one.

3. Pay Down Your Loans

The end of the year is a great time to take a good look at mortgage statements, auto loans, etc. and make sure that your payment plan is the best (and fastest) way for you to pay down that debt. Look at the amount per month that you are putting toward those bills. Does it make sense for you to pay a bit more per month and pay it off faster? Paying down those loans as quickly as possible will help to decrease the amount that you’ll pay in interest over the course of the loan. While you may not be ready to pay-off your loans in the New Year, putting a large dent in them will have you further down the path to being debt-free.

4. Reevaluate your Budget

Similar to taking a look at the status of your loans, it’s important to take a look at your budget and make sure that it reflects your income and priorities. Make sure, too, that it provides wiggle-room for those unexpected expenses as well as a balance going to savings. Looking regularly at your budget will help to ensure that it’s working for you and helping you to have funds available when you need them.

5. Talk to a Financial Advisor

Not sure where to start in paying down your debt? Your bank has a network of people ready to help. If you’re unsure of where to begin at paying down debt and getting yourself in better financial standing, talking to one of your bank’s advisors (or any trusted financial professional) will help you to look at the big picture and get a plan ready to tackle in 2016.

Bottom line? Make firm plans with a clearly stated budget and stick to them. Don’t allow emotions or commercialism to talk you out of the freedom of becoming debt free. Trust us, you will be glad when you get there! And if you are already debt free you know that it is also a battle to stay there. By putting clear boundaries in place, you will walk in the financial freedom that we believe the Lord intends for His people!

Do you have other tips on how to kick-off the New Year debt free? Please share your ideas!

Merry Christmas & Happy New Year!

Mike & Carlie
fulfillingyourvows.com