Christmas spending often leads to extra strains on your finances.  Whether you have taken out extra loans to cover your outgoings or maxed out the credit cards on gifts for friends and families, either way, help is at hand.

It may be a case of your debts have simply spiralled out of control regardless of the Christmas expenditure.  If so, now is the best time to sit down and take stock of the situation in a bid to regain control of your finances.

Take A Time-Out

The first place to start in taking control of your debt is to put aside at least half a day to sit down and really sort through your finances.  Too many people try to juggle their finances with work and the kids and never really devote the right amount of time and focus to get things properly sorted and so the problem perpetuates or even gets worse.

Outgoings

It stands to reason that the more money you have going out, the less money you have to put towards paying off your debts.  Therefore, make a comprehensive list of all your outgoings down to the final cent.  This should include all the obvious things such as gas, electricity and mortgage payments but should also include other less obvious things, such as how much you are spending on lunch at work each day, your cable bill and newspaper subscriptions.

From this list you should then be able to identify outgoings that can be cut.  Then allocate this money towards paying off debts.

Pay Off The Highest Interest Debts First

If you have debts then it makes sense to pay them off as quickly as possible.  The quicker you pay them back, the less interest you will pay.  Therefore the best idea is to target the loan or credit card with the highest rate of interest first.  Pay the minimum payments on everything else and then pay as much extra as possible to the highest interest loan.  This should chip away that debt as quickly as possible.  When complete, move on to the second highest interest rate and so on.

Too many people try sharing the money out between all their cards equally, but this is actually the most inefficient way of doing things as it means you will be paying the higher rate interest loans and credit cards for longer and therefore racking up more cost.  Always focus on the most expensive form of lending first and get it eliminated as quickly as possible.

Get A Zero Percent Credit Card

Probably the best advice is to consolidate as much of your debt as possible on to a 0% credit card offer.  This will allow you to focus your payments, eliminate interest (at least temporarily) and get more of a grip on your borrowing.

One of the hardest things about debt is when you are faced with numerous different payments from different lenders relentlessly.  Consolidating this into one payment can be very beneficial.  Across the US you will see plenty of “debt consolidation” companies around offering to do this for you but they will make an additional charge, so why pay them when you can do it yourself and put that extra money towards paying your debt off quicker?!

A 0% credit card is a credit card that will allow you to transfer other debts onto a card that will charge you no interest for a certain period of time.  The period of zero interest is important as obviously the longer you can have no interest, the better.  Some cards offer this for as little as three months while some cards have been known to offer it for up to 18 months or even more!

If you manage to find a credit card with a good length of 0% interest then it will help you to regroup.  Interest payments are one of the biggest problems about paying off a debt as it means that the balance owed just never seems to shrink.  Putting everything on to a 0% credit card means that every penny you are paying towards your debt is then actually paying off the money you owe rather than just covering interest payments and charges.

Another bonus is that you will then only have one monthly payment rather than dozens of bills popping through the mail every week.  This again gives you a chance to catch up with everything.

Using a 0% credit card can be an effective way of getting control of your debts and making a serious dent in what you owe.

Make The Most Of It!

The most important thing to remember when consolidating your debts on to a zero percent credit card is that it is essential you make the most of the 0% special offer period.  Try not to slip into old habits with the extra money you have available – Make the cuts from your outgoings and allocate every single spare cent you have to paying off the debt as quickly as possible.

By focusing as much money as possible into payments on a 0% credit card, you will be able to make maximum impact in what you owe.  It may mean that you can pay off all your debt before the interest even kicks in, but worst case is that when the interest kicks back in you are only paying interest on a much smaller and more manageable amount.

Also, make sure that you do not use the 0% credit card to make additional purchases.  Some cards will only charge 0% interest on balance transfers and not new purchases.  If that is the case, by making new purchases on the card you are undoing any good work you have done in your repayments.

So, get a zero percent credit card, consolidate as much of your debt on to it as possible and then eliminate as many of your outgoings as possible.  Then focus all these savings on to clearing your debt as fast as possible.  Before you know it, you will be back in control of your finances and the New Year will look a lot brighter!