Right about now, with Christmas so close, some people find themselves looking under the tree and wishing things were different than what they are. There’s no point in driving ourselves deep into debt for things we don’t absolutely need, especially not all because of one day of the year. Here are four tips to help you create less debt in the new year.
Establish a budget.
Know your income. Know your recurring bills, including what their due dates are. Establish a budget, including all mandatory expenses such as housing, utilities, car, and the like. Reduce all nonessential spending where possible. Plan your budget according to your income and your responsibilities, eliminating the frivolous and unnecessary. The goal is to spend less than you earn, ideally leaving some to put away.
Pay your bills on time.
Pay your bills on time, particularly those that may have interest or late fees attached. Interest and late fees will drive your debt even higher so they must be avoided. You know what’s due when from when you established your budget. if you cannot pay things on time you should speak to the creditors to see if you can adjust the due dates.
Change your spending habits.
Buy only what you need. The things we want are not necessarily things we need. Pay with cash whenever possible. If you don’t spend more than you earn and you only use cash you won’t create more debt. If you must buy something but don’t have enough cash, see if a layaway payment plan is available.
Start holiday shopping early.
Start your holiday shopping early. If you begin shopping earlier in the year you will have more time to give thought to what people will appreciate and find useful without spending premium prices and spending your valuable time in crowded stores.
Do you have any tips for creating less debt?