Created: January 22, 2021 10:16 AM
Now that the holiday shopping season is officially over it's time to face the hard truth about the financial damage we caused to our wallets this year- and there is nothing quite as daunting as taking a look credit card statements in January.
Local financial professional barry bigelow shares some tips to keep in mind when trying to tackle those bills.
"The first thing you want to do is take an inventory. Statements come in at different times so make sure you get them all in one place," says Bigelow. "Use a spreadsheet, write them down on a piece of paper, make sure that you understand the interest rates, the payments and when each one is due."
After the statements are in order, pick a payment strategy. There are two options for this. First is the avalanche method which is tackling the one with the highest interest rate first.
The second strategy is the snowball method which focuses on paying off the statement with the smallest balance, then going to the next consecutive smallest.
According to Bigelow, either method is going to save money over time so pick a strategy and run with it.
Then look to taking a spending freeze, or do what is often called a spending fast. Freeze all the things that are not necessary, and make sure that the things being spent on are really critical for the financial future.
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