The real-feel temperature might still be hovering around 100, but before you know it, the humidity will take a break, and the holiday season will be here!
The holidays are a time to come together, celebrate the year, and spread cheer. But if you’re not careful, they can also bring more financial strain. Plenty of households are already juggling higher interest rates and climbing credit card balances.
But — there are Christmas lights at the end of the tunnel, and Hello is here to help! With a little planning and preparation, you — and your finances — will be ready to tackle the holiday season with a smile!
Get a Bird’s-Eye View of Your Debt
It’s easy to get overwhelmed by multiple high payments and rising interest rates, and lose sight of the big picture.
First, get a bird’s-eye view of your credit card debt. List out every:
- Credit card balance
- Interest rate
- Minimum monthly payment
- Payment due dates
This is your starting point — with everything in front of you, you can fully assess your situation and build a repayment plan that works.
Build a (Short-Term) Budget
We know that minimalism isn’t everyone’s cup of tea. The good news? It’s not forever. To get your debt under control, consider cutting all nonessential spending for a few months. This could include:
- Eating out
- Streaming services you have for one show or movie
- Impulse buys
- Subscriptions or memberships you only use once a month
It’s easy to get caught up in swiping your credit card, so consider paying with your debit card more often. This may help curb your impulse buying and overspending. Again, this isn’t forever, but even an extra $100 here and there can help you turn overwhelming debt into manageable monthly payments.
Check Out Debt Reduction Strategies
The two most common debt payoff strategies are:
- Avalanche Method: Take on the debt with the highest interest rate first! Pay off that debt, then move on to the next highest interest rate, until you’ve paid off all your debt.
- Snowball Method: Start small and build momentum with our Freedom Loan! Tackle your lowest balance first, then move on to the next lowest and add to the payment. Keep going until you’re debt-free!
Look at your finances — no debt reduction strategy is one-size-fits-all. Between personal payoff methods like the Avalanche and Snowball Method, and more intense strategies like balance transfers, it’s important to figure out what works best for you.
If you have any questions or need help choosing the best strategy, our team is here to help.
Press Pause on Spending
If you’re tackling high credit card balances, avoid adding more to pay off. Whether you leave your physical card at home or turn it off in the Hello App, consider pausing your credit card spending.
Balance Transfers
While balance transfers aren’t right for everyone, it might be helpful to move high balances with high interest rates to a card with a lower introductory rate.
Be sure to research fees and limited-time rates before committing to a transfer.
No-Spend Challenge
Try a “no-spend” challenge for a week and limit yourself to essential purchases only. Ask a friend or family member to be your accountability buddy and do it together!
Use any money you save to pay off your credit card balance and head into the holiday season with positive financial momentum.
No two people’s financial situations are exactly alike, and not every debt-reduction strategy is one-size-fits-all. If you need help or want to talk in more depth about your finances and find a solution that's right for you, we’re happy to help!
Feel free to contact our team or stop by a branch at your earliest convenience!
