Entering the New Year with Debt?: Goals to Get Back on Track

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By Alia Khan

Happy New Year! As we all know, at the start of the new year many people form resolutions. Unfortunately, these goals most likely are forgotten by February.  The year starts out with promise; we feel optimistic and ready. Then, life happens! Most likely life happens in the form of those nagging holiday bills that linger far after the tree is taken down or the candles are blown out. Failing to budget properly for the holidays almost always leads to trouble in the new year.

You are not alone in your post-holiday debt. Nearly three-quarters of Americans fail to budget properly for the winter holiday season. The holiday season brings on increased gift giving, food purchasing and travel costs. It is a happy time of the year where you can get caught up in the joy of the season and feel overly generous.  Or you make purchases you otherwise would not because they are on sale. The retail industry feeds on your “joyful giving” and temptation to buy items at a discounted price.

Goals for Getting Back on Track:

Assess the Damage– It can be brutal and easier to keep your eyes closed when you receive those bills in the mail.  Rather than tossing them to the side, look at them. Create a spreadsheet or some sort of tracking system to list all that you owe from the holiday season.

Pay your Mortgage, Car Payment and Student Loans FIRST– If you have really high credit card bills in January, it can be tempting to pay them off first, but you need to pay your necessities first and foremost.

Cut Back in the New Year– It may not seem like much but examine your monthly expenses and see which items you can go without temporarily.  Do you get coffee a few times a week? Or eat out once or twice weekly? Cutting back on some of these simple things can add more money into your overall budget.  You can think of it as a temporary resolution rather than a major lifestyle change.

Emergency Fund Use– If you are fortunate enough to have an emergency fund to dip into, think of it as a temporary fix and cut back in your budget until that fund is replenished. Similar to what I stated about cutting back in the new year, save until your budget is back on solid ground.

Seek Financial Counseling– I always recommend reaching out to find answers and help if you feel desperate and anxious about your financial situation.  There are ways to alleviate your debt that you may not know or have thought of.

Khan Law will work with you one-on-one to find the best available solution to your financial problems — whether the answer is pursuing bankruptcy, negotiating with creditors or undergoing credit counseling. I am proud to be both a legal counselor and dedicated advocate for my clients, and you can rest assured that I will help you through this difficult time, offering compassion, sympathy, guidance, unwavering support, and supreme confidentiality. Worried about affording an attorney? Please ask about our payment plans.

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