Minimise effects of holiday overspending

It’s easy to get carried away when shopping for those we care about, but the debt can cause issues.

11:33 21 November 2013

If you’re suddenly realising that you spent more than you wanted to during your holidays, you might be wondering how you’re going to pay off the debt that you incurred. Now’s the perfect time to review your budget and find out the funds you have available for repaying debts.

• First make sure that you have an accurate idea of your monthly expenses. It is easy to miss smaller purchases, so do not rely exclusively on your official budget. Look through receipts, bank statements, and other records to get a more accurate idea of what you really spend on during the month.

 

• After looking at your normal expenses, try to minimise the cost of repaying the debts you incurred over your holiday. You might be able to do a balance transfer to shift debt from a higher interest rate to a lower one, or you might be able to cut expenses and use the money you saved to pay extra on your debt.

 

• If you spent a significant amount on a credit card, you might want to consider finding out if you qualify for a personal loan. Banks are often able to give loans at better rates than are offered by credit card companies.

 

• Depending on the type of banking account you have, and the amount you put on your credit card, you might be able to take out an authorised overdraft to cover the amount at a much better rate. If you have that option it would reduce the amount of time it takes to repay the debt, and possibly reduce the amount of the monthly payment required as well.

 

• If you find that you overspent during holidays and your budget doesn’t allow money for you to make the repayments, you may need to find a temporary part-time job or cut your expenses.