If managing debt is among your New Year’s Resolutions, don’t worry, you’re not alone. Managing and reducing debt is one of the top ten resolutions every year. Dealing with debt can feel frustrating and overwhelming, making it harder for you to reach your goal. However, with some helpful tips (and the help of your trusted credit union) you can be one step closer to sticking with your New Year’s Resolution this year!
Don’t spend money on things you can’t afford. Have you ever wanted something you can’t afford? Who hasn’t, right? The “Keeping up with the Joneses” mentality surrounds us every day. As hard as it may be, make sure you are living within your means and don’t be tempted to jump on the bandwagon just because someone else has it. Although the want of “stuff” you can’t afford might never completely go away, there are some things you can do to help change your mindset:
- Make a list of your material “stuff”. Write everything down that you have paid for on credit. Reflect on your purchases by asking yourself “Do I still have this stuff?” “Do I still use it?” “What condition is it in?” “Did I get my money’s worth out of it?” And most importantly, “Was I happy after I bought it?”
- Figure out what makes you happy now. Factor in your family and friends, your job, and hobbies. Once you know what makes you happy, start doing more of those things instead of unnecessarily spending money.
Pay off more than the minimum amount due on your credit cards every month. While it may feel like a lot of money up front, paying more than the minimum amount due on your credit card will not only help you pay off your debt faster, but it will also save you money on interest in the long run.
Develop a long-term and short-term financial plan and put it into action. Be sure to document both long-term and short-term goals. This can help you stay on track by having somewhere to refer back to when you’re feeling a little less inspired, and to help you understand your goals and how you’re going to get there. Long-term goals are defined as something you want to do in the future. These types of goals require time and planning and they are not something you can complete in just a few days. A short-term goal is quite the opposite; it’s something you want to do in the near future, meaning today, this week, this month or even this year.
If you’re carrying debt on more than one credit card, consider paying down the card with the highest interest rate first. Although this might not give you the gratification of saying you paid down a debt quickly, you will save money in the long run because you will be paying less in interest. You could also consider transferring your high-rate credit card balance(s) to a Sandia Area low-interest credit card. You’ll save on interest and pay down your debt faster- making this a double-win for you. Actually, make that a triple-win when you consider we don’t charge a balance transfer fee (like most institutions). See, we told you we could help!
« Return to "Articles of Interest"