Gifts have been opened, decorations have been carefully put away, and the holiday spirit is coming to a close. But there is one last visitor: Debt.
It’s the true post-holiday Grinch. Nobody wants it around. It’s a byproduct of seasonal overspending — I’m certainly guilty of it, as my holiday shopping catchphrase is “One for you, two for me.”
So, how do we bounce back, besides waiting for our tax return? I asked two amazing military spouses who specialize in personal finance for service members, spouses and families to offer guidance for a debt-free start to 2018. Some of their tips:
1. Set goals. No one wakes up one day and decides to run a marathon, said Katie Christy, a financial counselor and founder of the personal/professional coaching site Activate Your Talent. They begin training well in advance for that goal — and financial goals, both long- and short-term, aren’t any different. Identify your “finish line,” or series of finish lines, and plan accordingly.
2. Fight old debt. Service members should check to see that their credit card company and other lenders are complying with the Servicemembers Civil Relief Act, said Christine Maxwell, founder of Her Money Moves. The SCRA limits the interest rates that can be charged on debts incurred prior to military service, along with other benefits.
3. Deal with new debt. If you can’t make the minimum payments on your credit cards, or you have to pay interest on multiple cards, you might want to think about credit card debt consolidation, Maxwell said. Check to see whether any of your existing cards have balance transfer offers, where you can consolidate your debt to a card with the lowest rate. If you have good credit, you might be able to find a zero-percent offer for 12-18 months that would let you focus on paying down your debt without worrying about interest.
4. Save that raise. Service members received a 2.4 percent raise in January. If possible, schedule your raise as an automatic payment to go to either debt or savings, Maxwell said, so you won’t even have a chance to think about spending it.
5. Celebrate success. When we get in shape physically, Christy explained, part of our ability to stay on course comes from the changes we see in our bodies. When we eat healthy and hit the gym, we tend to like what we see in the mirror; that visual feedback inspires us to continue our fitness journey. However, many people give up too early on their financial goals because they are not “seeing” the results of their tighter budgets. Make a point to check in on your investments, and find ways to celebrate your hard work.
6. Meal prep. Speaking of getting in shape — we spent the holidays eating a lot, and eating out a lot. Start off 2018 with a meal plan and a resolution to eat out less, Maxwell advised, and you’ll skimp on more than just calories.
7. Go bare-bones. For a month, cut out all the “extras” you can think of in your budget, Maxwell said. No more meal delivery kits, movie channels or date nights. Dump the gym membership and mix in some runs or pushups. No matter what it is you treat yourself to, go a month without it — not only will you save money, it might show you that you don’t really need some of the things you thought were essential.
8. Cash in. Did you get a lot of new stuff from friends and family over the holidays? Awesome. Now’s a perfect time to ditch the old stuff, Maxwell said. Sell used clothing online at places like ThredUp or Poshmark. In person, try stores like Plato’s Closet or Once Upon a Child. Use apps like LetGo to list things you just don’t need anymore. You’ll make a little cash — and free up a lot of space.