That queasy feeling in the pit of your stomach after the holidays may have more to do with your credit card bill than all that Champagne you knocked back on New Year's Eve.
In a recent Yahoo poll, nearly 70% of readers said they used credit cards to pay for their holiday shopping this year. Unless you got a fat wad of cash from Santa, you’re probably kicking off 2015 in a world of debt.
But don’t worry. With these tips, you’ll be debt-free in no time.
1. Get real about your debt.
Check out your credit card statements and take stock of what you owe. Just try not to freak out.
Figure out what you can afford to pay. Add up your fixed expenses -- like rent, car insurance or your student loan payments. Then add up stuff that’s more flexible, like groceries and gas. Once you’ve got your tally, subtract all of these expenses from your monthly income. Or, make it easy and use a site like Mint or Learnvest, which do all that work for you.
If you’ve got cash left over, awesome! That cash can be used to start paying off your credit debt, and you’re on your way to debt freedom. If you don’t, you’ve either got to find ways to cut those costs OR bring in extra cash.
2. Find ways to earn more.
Get a side hustle. If you’ve got a bankable skill like web design or you’re handy with a mop, sign up for a site like Taskrabbit or elance.com. You can get paid to help other people with their to-do lists. January is also one of the best months to find a job, so if you’re feeling unhappy at your current gig, now’s your chance.
Purge and sell: Get a head start on your spring cleaning and start looking around the house for stuff you can sell online.
3. Kick bad money habits.
Try cutting cable for a few months while you work on your debt. Carpool with a friend to work. And maybe don’t go straight to happy hour after you leave the office.
We know old habits die hard, so start figuring out ways to replace them with new ones. If you cut cable, ask a friend to share their Hulu or Netflix password. If you stop going to happy hour, join a free running club after work. Or, even better, dedicate that time to your side hustle.
4. Be strategic.
Start with your most expensive debt first -- that means focusing on credit cards with the highest interest rates. Then work your way down the line.
Consider a balance transfer. You can find some pretty sweet 0% balance transfer deals out there today. (You can find options on sites like Bankrate.com and Nerdwallet.com.) By transferring debt from a high interest card to a card with 0% interest, you could be saving tons.
Don’t do it alone. Like working out, paying down debt is always more fun when you’ve got a buddy to join in your misery. Ask your partner, a friend or a coworker to help keep you on track. And check in with each other every couple of weeks to see how much progress you’ve made.
5. Put your money where your mouth is.
If you need more than a buddy to keep with the plan, check out a new website called Stickk. You tell Stickk what goal you want to achieve and how you’re going to do it -- and if you don’t succeed, Stickk charges you real cash! A slightly friendlier -- and less expensive -- tool is SaveUp, a prize-linked savings tool that gives you points every time you pay off a credit card or save money. The more points you earn, the better your odds are of winning prizes like hotel discounts and retail coupons.
For more of your debt questions answered, check out Ask Yahoo Finance on Tumblr.
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