Category Archives: Reducing Debt and Debt Management Advice

How to Pay Off Your Holiday Credit Card Debt in 3 Months or Less

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The holidays are a time for joy, family, giving … and racking up debt. More than a quarter of Americans have fallen into debt paying for holiday expenses — and it’s not a small amount of debt either. Overall, the average amount owed among those with holiday debt was more than $1,000. Of course, it’s easy to feel the pressure to spend during the holidays. But you don’t want to let overspending set you back financially in the new year. So if you ended up charging a little too much in 2018, here’s how to quickly pay off your holiday debt and start 2019 off on the right financial foot.

1. Figure Out How Much Debt You Have

To pay off your holiday debt quickly, you need to know what you’re dealing with. That means opening your credit card bills or checking your statements online. Add up all your balances to get a clear picture of how much holiday debt you have.

2. Develop the Right Debt Payoff Mindset

You might feel overwhelmed by how much you owe. But you can find the motivation to pay it off by focusing on the benefits of being debt free. Ask yourself why it is important to you to pay off your debt and what you’ll do with the extra money once your debt is paid. Having a specific goal will give you willpower to pay your debt off and not continue to charge. Maybe your goal is a vacation to Hawaii this summer. Print out a photo of your financial goal and keep it somewhere that you will be forced to look at it daily, and remind yourself that you’ll book the vacation once your holiday credit card debt is paid off and you start to save that money for your trip.

3. Create a Debt Payoff Plan

Another way to avoid feeling overwhelmed by your debt is breaking down the total you owe into manageable amounts. For example, if you have $1,000 of holiday debt and want to pay it off in three months, you’d need to make monthly payments of about $333. If you get paid twice a month, that’s about $166 per paycheck — or $11 a day. You could also make a chart showing how much you need to pay each week or month to eliminate your debt and track your progress.

4. Start as Soon as Possible

You don’t have to wait until you get your credit card bills to start making payments. The more frequently you make payments, the less interest you’ll end up paying and the more quickly you’ll be paid off. If you can, consider making weekly or biweekly payments.

5. Try Paying Off High-Rate Debt First

Focusing on your credit card or loan with the smallest balance first and making only minimum payments on other debt can help you feel a sense of accomplishment and build momentum to pay off bigger debt. However, you could actually pay off what you owe faster by prioritizing your debt with the highest interest rate.

6. Find Expenses You Can Temporarily Eliminate

To pay off your holiday debt quickly, take a look at what you might be able to live without for a few months. You could cancel some subscription services, eliminate lunches out and make coffee at home to free up extra cash for debt repayment.

7. Minimize Costs You Can’t Eliminate

You can’t eliminate all of your monthly expenses, but there are plenty you can reduce. For example, can you call and try to cut your phone or cable bill? Every little bit helps.

8. Make Extra Money for Debt Payments

After the hustle and bustle of the holidays, take time to go through your stuff to find things you no longer need that you can sell for cash. You can sell DVDs, books, clothing, tech items and unwanted gift cards online. You also could pick up a side hustle in your free time to bring in extra money for debt repayment.

9. Make Use of Credit Card Rewards

If you have cash back or rewards credit cards, consider putting them to use to help pay off your holiday debt.

10. Stick to Cash

If you want to pay off holiday debt quickly, you have to avoid racking up more debt. Allot yourself a certain amount of cash each week. Once it’s gone, it’s gone. Not only can using cash help reduce your reliance on credit, but also it might help reduce your overall spending.

11. Create an After-Action Plan

After paying off your holiday debt, you need to take steps to avoid racking up debt again next holiday season. Create a savings plan to have enough cash for the holidays in 2019. Just as you created a plan to pay off debt by breaking down what you owed into smaller payments, you can figure out what you need to save based on 2018 holiday spending. Then, divide that amount by the number of months left in the year until the holidays to know how much you need to set aside each month.

Article Source: Cameron Huddleston for Gobankingrates.com

3 Ways to Stay Out of Debt

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Your student loans are paid off, and you finally got rid of that credit card debt. It’s a great feeling to be debt free, and it only feels better when you’ve stayed that way for a while. Going forward, here are three things to be mindful of if you don’t want to slip back into debt.

Be ready for the unexpected: A car wreck could happen in an instant and you could be responsible for car repairs or medical bills. If you’re not prepared with an emergency fund, you might have to put those payments on credit, and then you’ll be right back where you started. Make sure you start saving a little bit every month, so when those unexpected bills happen – you’ll be ready.

Stick to your lists: Always make a list before you go shopping. If you like shopping with your credit card (credit rewards or cash back can be great), make sure you buy only what you intended to. A few extra bucks here and there can cause you to go over budget, and even leaving a small balance on your credit card can get you in trouble over time.

Take a long look at your subscriptions: Whether it’s a gym membership, a streaming service, magazines, or whatever else, make sure you’re really getting value out of any recurring purchase that you’re subscribed to. If you haven’t been to the gym in the last couple years, it’s probably time to stop giving them your money – even if it’s only twenty dollars a month.

Article Source: John Pettit for CUInsight.com

Debt and Dating: Can Poor Financial Habits Keep You in the Friend Zone?

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It’s the month of love. And dating is all about discovery. It can be fun to open up and share a few personal details with someone we’re attracted to. In turn, learning more about the other person is a great way to spark conversations that go beyond polite formalities. But while we’re more than happy to show our highlight reels, we all have those things we’d rather not talk about. You know, things like misspelled tattoos. Failed relationships. An affinity for Nickelback. High school, in general. But what about our financial habits?

Is it possible that the way you manage money could have an impact on your relationship prospects? It’s a fair question, and a recent survey of 2,000 millennials uncovered some interesting opinions about debt and its impact on a person’s dating potential.

Does debt matter? Yes. And no.

In short, significant debt is frowned upon, but according to survey responses, it’s not viewed as negatively as being a workaholic. That’s the dating game in a nutshell, isn’t it? Don’t work too little and don’t work too much. Apparently, sensible moderation is attractive. So, what do you do if you’re interested in someone but your finances aren’t as solid as you’d like?

Before you start fumbling for the right words to confess your mountain of debt, don’t get ahead of yourself. Less than 10% of people thought that this kind of information should be shared early on. More than 87% thought it best to wait until the relationship becomes exclusive or moves to the point of sharing household expenses. So, if you’ve just started seeing someone and have more debt than you’d care to admit—relax.  You’ve got time.

To share or not to share, that is the question.

Maybe all this talk about debt and dating has you wondering whether you’d be willing to share your most intimate financial details with a potential partner. The survey designers wondered the same and posed an interesting question: Would you rather tell your partner about your large debt or a pre-existing medical condition? Not surprisingly, the majority of respondents said they’d rather spill the beans about bloated borrowing. But it’s worth noting that more than 39% said they’d find it easier to divulge their most personal medical details.

If almost 40% of people would rather reveal their personal medical history instead of discussing monetary struggles with a potential partner, it’s safe to say debt-related anxiety can impact us emotionally as well as financially. If there’s a takeaway from this survey, maybe it’s the fact that debt and relationships have something in common: Neither improves when ignored.

Three tips for navigating the debt discussion

  • Understand your debt. Rather than lumping everything you owe into one negative category, it’s important to remember not all debt is bad. Home mortgages and student loans are traditionally viewed as desirable, while credit card debt and payday loans can be roadblocks to financial success. Knowing the details of your debt is essential to managing it effectively. (It can also help you sound smarter if, and when, the topic comes up on a date).
  • Eliminate bad debt ASAP. High-interest credit cards, auto loans, and title loans can throw you into a tailspin of making minimum payments that never pay down the principle balance. Whether you cut frivolous spending or pick up a side job, find ways to pay off the accounts with the highest interest rates first.
  • Get a good wingman. When it comes to your finances, there’s no shame in admitting you need help. With debt management tools ranging from credit counseling to low-interest consolidation loans, your credit union can play a pivotal role in your financial success. And judging from many of the survey responses, a solid financial foundation may improve more than just your credit rating.

Need a little help managing your debt and want to sit down with a First Financial representative to help with debt management strategies? Stop into your nearest branch location, email marketingbd@firstffcu.com, or call 732-312-1500 to schedule an appointment. We’ll help you get back on track!

Learn to manage your credit and reduce debt with our easy guide.

Article Source – Survey Data

4 Reasons You’re in Debt

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Status.

We’ve all heard of “Keeping up with the Joneses.” It’s that desire to have the things others have that may be too extravagant for your budget. If you go around thinking about the things you feel like you’re missing out on, you’re probably going to put yourself in a financial hole. Take a pause when you feel an impulse-buy coming on, and save yourself a headache later.

Credit cards.

Don’t let your credit cards be in charge (no pun intended). Take hold of your finances and don’t spend money you don’t have. Sure, there are benefits to using credit cards, but they can also be your worst enemy if you’re not careful. Use credit cards to build good credit but once you start racking up debt, it can take a long time to get out from underneath it.

Unforeseen expenses.

Sometimes expenses come out of nowhere. You may feel like you’re doing good, but then your engine fails and you need a new car. Be prepared. Make sure you’re building up an emergency fund, because if you don’t have it when you need it, you’ll end up putting yourself in a deep hole in the blink of an eye.

Life is expensive.

You may think your budget is mapped out and solid (and it may be), but then your best friend gets engaged. The next thing you know, you’re hitting up an ATM machine. Sometimes, you need to spend money celebrating, but plan ahead and you’ll be doing yourself a favor down the road.

Get yourself on track financially with our budgeting guidebook! Need help creating a budget you can stick to? Attend one of our free budgeting seminars during the year or make an appointment with a representative at your local First Financial branch.

Article Source: John Pettit for CUInsight.com

 

The 4 Fastest Ways to Pay Off Credit Card Debt

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There are many reasons why most of us decide to sign up for a credit card. Whether it’s to help boost your credit score or as a means of purchasing a more expensive item that you plan to pay off in increments, credit cards can be a smart option for your finances. Unfortunately, they can also be very detrimental to your budget if not used wisely or paid off in a timely manner. If you’re feeling stressed about your card balances – keep your head up and remember you can work your way out of debt! Here are four fast tips for effectively paying off your credit cards.

Cut them up.

This may sound like an obvious solution, but it is an enormously effective one. Stop the behavior that has gotten you in trouble in the first place and put an end to making charges once and for all. Moving forward, plan to only make purchases you can pay for right away and begin the process of working your way out of the debt you’ve created.

Pinpoint the problem.

What is it that you’ve had to use your cards to purchase? Clarity is key when it comes to your personal finances. Are you living out of your means and making high end purchases that you simply cannot afford? Are you making poor financial choices like eating out too much that you can easily rectify? Sit down, look at your credit card statements, and alter your lifestyle accordingly.

Compare interest rates.

If you owe on multiple cards, go back and review each one’s interest rates. Many people automatically assume that the card with the highest balance is the one to work on first, but this is a mistake. The high interest rates are what will get you in the end, so concentrating on those cards will have a greater impact on your finances.

First Financial’s Visa Credit Cards come fully loaded with higher credit lines, lower APRs, no annual fees, a 10-day grace period+, rewards, and so much more!* Click here to learn about our cards and apply online today.

Get a side job.

Sometimes, if your debt is going to take a significant amount of time to control, it’s best to look into other sources of income. There are often easy ways to make money on the side to get a few extra dollars in your pocket.

*APR varies up to 18% for purchases, when you open your account based on your credit worthiness. The APR is 18% APR for balance transfers and cash advances. APRs will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of $10 or 3% of the total cash advance amount—whichever is greater (no maximum), Balance transfer fee of $10 or 3% of the balance—whichever is greater (no maximum), Late Payment Fee of $29, $10 Card Replacement Fee, and Returned Payment Fee of $29. A First Financial membership is required to obtain a Visa® Credit Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

+No late fee will be charged if payment is received within 10 days from the payment due date.

Article Source: Wendy Bignon for CUInsight.com

How to Get Back on Track If You’re Drowning in Debt

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bigstock-Businessman-Run-Away-From-Debt-103353212Getting out of debt is much harder than getting into it. But you can do it — and along the way, you’ll rid yourself of a lot of stress.

Countless people find themselves drowning in debt simply because they can’t control their spending. If this sounds familiar, try tracking everything you buy for a month, including all those “little” items that cost just a few dollars. Once you see how those purchases add up, you’ll realize how important it is to lay out a budget and stick to it.

Understanding how much you actually spend is a good first step, but that alone won’t get you out of debt. The following strategies for managing different types of expenses — and bringing in some extra income — can you help you reach a happy, debt-free future.

Control your credit card usage. If credit card debt is the problem, take these steps right away:

  • Cut up your cards: Save one card for use in emergency situations. Cut up all the others, and throw away the pieces.
  • Pay with cash: Only pay cash for purchases such as groceries, clothing, and gas.
  • Attack high-interest debt first: Pay off the credit card with the highest interest rate first. Once this card is paid off, apply what you were paying on it to the card with the next highest rate.
  • Negotiate a lower rate: Negotiate your interest rate with your credit card companies. Your issuer will usually work with you if you say you’re going to transfer the balance to another card with a lower rate.

Cut some recurring expenses. Most people have recurring monthly expenses that can be eliminated, including:

  • Excess phone service: If you have a mobile and a landline, you probably don’t need both. Pick one and stop paying for the other.
  • Satellite/cable television: Consider disconnecting satellite or cable service and replacing it with a streaming service, such as Netflix or Hulu. You can get entertainment at a fraction of the monthly cost.

Keep an eye on your indulgences. We all have little indulgences we like to spend money on here and there, but we often don’t realize how much they add up.

  • Specialty coffee: Stopping by Starbucks on your way to work every morning is certainly a luxury you enjoy, but you could save $25 or more a week by making your own coffee at home.
  • Fast food lunches: If you work outside your home, chances are you buy lunch out at least a couple of days per week. These costs mount quickly. Even if you spend only $40 per month eating lunch out, that’s $40 that could go to your savings account or toward a credit card payment.

Bring in extra income. When you lose control of your finances, getting out of debt requires serious action.

  • Take a second job: No one wants to work 16 hours per day, but if that’s what it takes for your family to thrive financially, then it must be done — at least temporarily. It may be that working an additional, part-time job for just 20 hours or less per week is all that’s necessary to help you out financially.
  • Sell things you don’t use: Many of us keep things we no longer need in the basement or storage shed. Sell any item you haven’t used within the last year online or have a garage sale.
  • Sell your (extra) car: If you’re a two or three-car household, chances are you could make do with one less car. Consider selling one if it isn’t a necessity.

Reduce debt — and stress.

It requires work and a commitment to doing what it takes to reduce your expenses-to-income ratio. Once you make that commitment, you’ll find that your bank account grows and your stress level decreases.