Come January, you won’t have to dread your bills from holiday purchases if you follow these strategic spending tips from personal finance experts Liz Weston and Clark Howard.
1. Make a spending spreadsheet
Organizing your expenses in a spreadsheet can help you see what you can cut before you even start spending. NerdWallet’s Weston uses her spreadsheet to find room to trim down her original travel, food and gift expense estimates.
2. Keep a list handy when shopping
Howard advises carrying a list with you detailing the names of everyone you’re planning to buy a gift for (including yourself) and subtracting the cost of each gift from the total budget.
3. Plan how you’ll pay off your debt
- A 0% balance-transfer card without a high upfront fee will transfer your high-interest credit card debt to a card with a 0% interest rate for an introductory period up to 21 months, depending on the card you choose. Expect a balance-transfer fee that reflects a percentage of the total amount you transfer. Only use a 0% card if you plan to pay off your debt, or most of it, within the introductory period, says Weston.
- A personal loan forces you to pay off the debt over time using set payment amounts. It’s possible to get a lower interest rate with a personal loan to pay off credit card debt, Howard says. Your rate will be fixed, but will depend on your creditworthiness and other income factors.
No matter which option you choose, timing is everything. Howard suggests creating a plan to pay off your debt within three years at most to keep you focused on your goal. And Weston and Howard advise resisting the urge to run up more purchases on your credit cards while you’re paying off your debt.
Make a resolution to engage in some spending self-control this holiday season. Your January self will thank you.
The full version of this story is at Clark.com.