It’s January, and all that holiday cheer is catching up with your bank account. Sure you got some amazing deals—25, 50, 75 percent off everything your family ever wanted!—but the magic of Christmas morning is now overshadowed by hefty credit card bills. If only you’d taken a cue from the Grinch and remembered that Christmas doesn’t come from a store. So what now? Where do you go after the wrapping paper and twinkling lights are stored for the season but you’ve got bills you’ll be paying the whole year through? Here are six easy tips you can use for holiday debt recovery, taken from Melaleuca’s Simple Steps to Your Financial Freedom guide.
Add Up Your Debt
You spent too much—you know that—but how much exactly did you spend? It’s important to know exactly how much you owe and to whom before you can make a plan to get out of debt. You’re not going to beat yourself over the head with your bad decisions; you’re just going to take an honest accounting of how much you owe and admit that you need to make getting out of debt a priority.
All those amazing New Year’s sales? You’re going to skip them, even if they have amazing deals. After all, didn’t everyone just get a boatload of Christmas presents? You’ve fulfilled plenty of your family’s wants, so what you need is to stop spending and halt the upward climb of your credit card balance.
Look at all your incidental expenses, like how often you eat out, go to the movies, and do other fun but not really necessary things. No, you don’t have to live like a hermit and spend the rest of the year bored at home. But what about setting some limits—like only one or two outings a week?
Because it’s winter, you’ll also want to take a look at your heating bill. Keeping warm can be an expensive endeavor, but the simple tips below can help lower your spending without freezing the family.
- Invest in window and door treatments that cut down on heat loss. A drafty window or door is leaking more than just cold air—it’s leaking money. Caulk, weatherstrips and other insulation will pay off on your heating bill.
- Did you know that hot water consumes 14 to 25 percent of your heating bill? Lower your bill by making sure you wash your laundry in cold water. All EcoSense® laundry products are designed to be effective in cold water, so you’ll get great results while saving a few bucks.
- Add an extra blanket and lower the nightly temperature. Turning your thermostat down at night (or when you’re out of the house) can result in significant savings. Many thermostats are now programmable, so you can set it and forget it.
- Let the sun lend a hand by opening the curtains on south-facing windows. You’ll get some good old-fashioned solar power during the day, and you can close the curtains at night to keep out the chill.
Increase Your Income
This is where a Melaleuca business comes in handy. Building a Melaleuca business doesn’t require that you quit your day job, invest a large sum of money or go further into debt. A Melaleuca business is a simple, easy, low-cost way to add to your monthly income and loosen a tight budget.
The average monthly income for a Director/Director II is $179. To reach Director II, all you need to do is help 10 friends discover Melaleuca. If you’re looking for a little more income, make a goal to reach Director III, which makes an average of $639 a month. To reach Director III you enroll 11 friends and then help one of those friends enroll eight of their friends. That’s a significant income just for telling a few people about quality products that can truly benefit their lives.
For those who are already Director III or above, make a goal to develop at least one Director each month. Use the monthly promotions to maximize your business growth and motivate your team. You can also set a goal to advance your status by a specific date.
Power Roll Your Debt
Traditional wisdom says to pay off the debt with the highest interest rate first, but power rolling takes a different approach. Instead, you find the smallest debt you have and focus on paying that off first.
Here’s how it works:
Using the list you made in Step One, put your debts in order from largest to smallest.
Whichever debt on your list is smallest, target that one first. On every other balance, make the minimum payment, but on your smallest debt, devote every spare cent you can find. Conquering that first small debt will give you a quick win and a taste of the freedom that comes when you conquer your debts.
With your smallest debt out of the way take the money you were paying on that debt and put it toward the next debt. It could be a credit card or a store loan. With each debt you pay off, the amount you have available to pay toward the next debt will grow larger.
This is the hard part. Although you didn’t accumulate all that debt overnight, the sad reality is it’s a lot easier to charge a credit card than to pay it off. Don’t get discouraged if you don’t see amazing results in one or two months (or even six, depending on the size of your debt). Think like the tortoise and keep slowly moving forward—you’ll eventually win the race!