As the holidays approach, with Christmas and Hanukkah nearing, it’s the time when many of us fall into debt. This originally spiritual part of the year has been turned into consumption celebration for many Americans. As the shopping hangover rolls upon us in January, we often have the next 12 months cut out for us. Once festivities are history, we start making plans how to cope with new debt, much of which was unintended in the first place.
Post-holiday debt reduction goal isn’t easy without a plan. And having a sound simple plan is the most difficult hurdle to get finances under control. It’s easier to follow the plan once we know what the outcome will be, when we reach the proposed objectives, and how much effort it will require. So how to go about setting up a debt reduction plan?
This method lets you face a finance professional who will go over your income and how you spend it. He/she will teach you how to prepare a budget based on your current spending patters and help you understand your short-term and long-term cash flow based on your objectives. You can request an alternative budget that incorporates changes you can make to be financially independent and compare the two. It best to come prepared as this is a great opportunity to have all the questions you have about finance answered. Credit counselors can also help you handle current credit obligations. If you struggle economically and carry large credit debt, they can speak to creditors on your behalf trying to work out a plan that lets you become debt free without being burdensome. Of course being already in debt might not be a good thing to spend more but it is the quickest way to get organized.
Depending how much time you have available you could take debt management classes. There are plenty of classes either at community colleges or adult education centers that will help you better understand family and personal money management. Adult education classes tend to be shorter, often requiring just a single session. I think this is a great starting point as it puts you face to face with people who do it professionally and can suggest further help. Let’s not forget about online options with YouTube.com as a good beginning to get a better understanding of financial nomenclature.
Do it yourself
Depending on your level of discipline you can try taking charge of your finances by yourself. Software such as Quicken or Mint let you see where your money is going. This will provide a scope of your expenses on various categories ideally leading to you making conscious decisions every time you spend money. Once you categorize your expenses, every time you spend money they are placed in the categories you assigned. Both products let you create maximum spending levels for each category that is updated immediately and providing you picture on where you stand. Additional features allow you to set date by which you plan to get out of debt and manipulate different variables based on your situation.