Jan 8, 2009 11:45 pm US/Eastern
Consumer Advice: Paying Down Holiday Debt
CBS 2 HD Has Ways You Can Defeat The Mighty Bill Monster That's Due In Your Mailbox Any Day Now
NEW YORK (CBS) ―
Consumers bought a lot less this holiday season. Still, many are now starting to feel the economic pinch of those Christmas purchases.
But there are ways regain control of your money and cure that financial holiday hangover.
Despite spending a fraction of what she normally does at the holidays, consumer Alexandra Lieberman says she rang in the new year feeling broke.
"It was everything. It was groceries, going out to dinner, shopping, everything," Lieberman said.
Statistically, January bills tend to be bigger than any other month for many of us and even though you may have tried to keep to a budget chances are you went overboard.
"The bill is much larger than expected, usually two to three times larger than they expected," financial expert Ori Schnapps said.
So what's the remedy? Financial planners say first things first: get personal with your paperwork.
"This is a really good time in the beginning of the year to organize your financial life for the rest of 2009 and you can start off with some good habits," financial expert Avi Karnani said. "You can get to know all your terms and fees on your different credit cards and your accounts."
Second, organize your bills by when the payments are due or you could end up paying dearly with higher interest rates.
"Banks are less forgiving of your mistakes," Schnapps said.
Next, pay more than the minimum, even if it's just a little bit.
"You go out and you buy somebody a gift. That gift is going to cost three or four times as much if you just pay the minimum," Karnani said.
And keep track of when your zero percent interest rates expire so you can transfer balances if need be.
You can also help pay down the debt by returning items you received as gifts but know you won't use, or things you purchased but didn't give away.
There are a number of free online budget planners that can help you keep track of all this. They are available here.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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