If being home for Thanksgiving is important to you, you stop at nothing to celebrate the holiday with your family every year. Not even the steep price offlights deters you, nor the increased air traffic as everyone else has the same idea.
You have savings and a credit card, after all. You can put your flights and other travel expenses on this account and pay them off incrementally. But with a busy holiday season ahead, your reliance on credit and savings can complicate the end of the year.
What Happens When You Use Up Credit and Savings?
Your credit card and savings are safety nets. They provide financial backup when your typical paycheck isn’t enough to handle a big purchase or unexpected repair.
By maxing out your credit and draining an emergency fund, you can’t rely on these safety nets until you pay off debt or save more money.
Ideally, you can get on both of these tasks right away, paying off your balance and restocking your savings. But with the expensive holiday season underway, you might find it difficult to juggle everything.
Paying off your debt slowly over multiple billing periods means a few things:
- You accrue extra interest on your outstanding balance.
- Your outstanding balance may increase your utilization ratio, a factor of your credit score, which can lead to a lower number.
- You may not have enough room on your account to handle unexpected expenses during the holidays.
What to Do if an Unexpected Expense Happens?
Holiday nostalgia can make you forget that the season is like any other time of the year. Accidents and emergencies can happen. You can slip on ice and need to see a doctor. Your roof can start to leak. Or your dog can get into your holiday chocolate stash.
You can’t put off these expenses until you pay down debt. You have to see a doctor or vet right away, regardless of what’s in your bank account.
If you’re worried about how to afford an unexpected expense, your phone has the answers. You can search online or make the call to get started to learn more about personal loans. Reading about loans by phone is simple and convenient to do on the go, even while waiting in the vet clinic waiting room.
How to Pay Down Debt and Save During the Holidays
Whether or not you add an online personal loan by phone to your plate, you need to focus on your outstanding debt. This can be challenging during a season that’s centered around spending money on gifts.
You can chip away at your debt by making these small changes to your habits:
- Don’t add to your debt by opening new credit cards for gifts.
- Consider debt consolidation if you can get a lower interest rate.
- Prioritize high-interest debt according to the avalanche method.
- Always make the minimum payments to avoid added fines and credit damage.
- Talk to your family about spending less on gifts; focus on being together instead.
- Use a budget to cut out common money wasters, channelling this money into your debt.
- Send a little bit of money into an emergency fund.
Recovering from spending extra on Thanksgiving isn’t easy or quick, but these tips can help you enter the holidays with confidence. Stick with them into the new year for the best results.