Millennial Money Beat Your Summer ‘Revenge Shopping’ Borrowers Française |
The joy of yelling at friends over the roar of a crowded bar, the dizziness of seeing the world running under you from an airplane seat, and the weird twitch of wearing inelastic pants – brought on by the summer of 2021. Win back many experiences we have forgotten during the last year and a half of pandemic.
But this push to recreate a “normal” world may have found another familiar feeling. It is the anguish of getting into debt.
If the summer of your “revenge” spending comes for its own repayment in the form of extended debt, make a plan to pay it off. Next, think about ways to keep yourself from having more debt as you move on and back on your path to normalcy.
Store your debt – and find your payment pass
Whether you return to spend most of your time at home or spend time at the terminal before your flight, find the time to organize your debt and choose a payment strategy.
First, understand exactly how much you owe and to whom you owe it. If you don’t know all the details, Pamela Rodriguez, the official financial planner from Sacramento, Calif., Suggests removing your credit report, which you can do for free.
“Getting your credit report out is probably the fastest way to find out what you are borrowing because it doesn’t hide from your credit report,” says Rodriguez.
List your debts using spreadsheet, pencil and paper or the debt repayment app. Include every balance, interest rate, and minimum monthly payment. Make sure you consider all forms of debt, whether you’re buying it now or paying off a loan later.
Next, take a look at your income and expenses to see how much money you can invest in your debt and where you can reduce your expenses. For example, if you’re spending more at a restaurant than six months ago, try cutting it down and freeing up some money to pay off your debt.
Then choose a strategy to pay it off. Here are some common tactics:
• DEBTSNOWBALL: Debt Snowball lets you direct your debt repayment energy to the minimum balance first and minimize remaining payments. When the minimum debt is eliminated, then the amount you paid for it is passed on to the minimum debt. As you write off more debt, your payments will continue to snowball until you are debt free.
• DEBTAVALANCHE: This method first repays the debt with the highest interest rate. Then, like the debt snowball method, when it is repaid, it passes the payments on to the debt at the next highest interest rate.
• BALANCE TRANSFER CREDIT CARD: If your credit score is high enough to qualify, using a credit card with a 0% APR promotion period will allow you to pay off your debt faster and cheaper. than keeping it on your original credit card. to augment. Make sure to clear your balance before the end of the 0% promotion period to avoid paying interest.
Whichever payment method you choose, it’s important to decide and commit. Going back and forth between several different options can be long and expensive, as the debt continues to earn interest.
Thomas Nitzsche, financial educator at Money Management International, a non-profit credit counseling institution, said: “We have to agree that we have to do something and find a way to overcome this emotional barrier. .
If you can’t find a payment method that exceeds your minimum monthly debt, consider calling a nonprofit credit counseling agency for free budgeting and debt support.
Know your consumption habits and triggers
If your summer debt was the result of spending revenge, look for the triggers that caused you to spend too much money to avoid going into debt in the future.
For many, this may have been an opportunity to experience something they were stolen from in the first year of the pandemic.
Traveling and eating out may be safe for people with the vaccine, but these activities can drain your budget. Rodriguez suggests finding a more affordable way to enjoy the activity you are looking for.
“If you can think of one thing that was stolen, find a smaller one,” Rodriguez says. “Therefore, a little trip will take place in a local adventure, which is much more economically manageable.”
The path to a pandemic breakthrough has many starts and stops, and appears to involve the possibility of spending or saving money. Take advantage of the time when you can cut spending and spend more money on debt. Whether you have manageable debt or no debt at all, more options are available whenever the world is ready to fully take over.