What's YOUR New Year's Resolution?

The number one New Year's Resolution is to lose weight – why not get really serious about losing debt? There is a way! First, how did you get here – by overspending? To avoid the usual unnecessary splurge of funds, first account for your money before spending by creating a spending plan. This is as easy as writing down your monthly income and deducting your expenses such as bills, groceries, gas, outings, etc. Account for your money before spending, stick to your plan and don't resort to using your credit cards. With persistence and discipline you will reap great rewards of debt freedom.

Recover from Holiday Overspending

All of the rushing around crowded stores to get that special gift, gift wrapping and cooking and now it's all over. What's left? Likely unattended monthly bills and additional credit card debt. How to recover from all of this? Discipline! Here are some practical ways to recover from the holiday over-spending spree.

1.) Designate Money BEFORE Spending

You may have neglected to pay a couple of your bills with the good intentions of supplying loved ones with gifts but now you're paying for it…literally. No worries, we must start somewhere. Tally up all of your bills, starting with the most crucial. Hopefully you have a spending plan in place (a budget) and that may need a bit of altering for the next couple of months; if not, now is the time to start. Configure how much cash you will receive this month, including your spouse's income, and deduct your expenses (bills, food, gas, trips to the coffee shop) as best as possible BEFORE spending. By distributing your funds on paper BEFORE spending, you will make progress, catch up on late bills and pay down debt. Don't overspend in any particular area – stick to your plan!

2.) Cut up those cards!

Need cash? Consider those credit cards non-existent; they are no longer a source of funds for you. Credit cards should serve the sole purpose of covering emergency situations and establishing credit. Unfortunately, they have become a source to fulfill a "need" which could range from that new sweater to even going out to dinner. The problem with that is you are spending beyond your means; in turn you acquire more debt instead of paying it off. Your spending plan (budget) should be based on what you bring home on a monthly basis and you need to stick to that so you can pull yourself out of debt and start building an empire instead of digging a hole. Once you've learned to live on what you earn you will feel accomplished and independent from the credit card companies, and you can work on real goals and not just making it each month.

3.) Need vs Want

You want to get out of that hole, don't you? Start defining what it is you are overspending on each month that you don't need. We can figure out an excuse to purchase just about anything, in fact, we don't need to as the advertisers do it for us. You NEED this car, you NEED to purchase these Christmas ornaments, after all, they are 75% off! There will always be a sale, and while sales are what you need to follow, you don't need to purchase all sales items that entice you. Yes, buy your groceries on sale but don't buy everything that is on sale. Really think about what you can do without. When in doubt, go home and think about it and if you decide you do in fact "need" it, then you can always go back and get it. This will free up more funds so you will not be tempted to use those credit cards.

4.) Limit your Entertainment

Well, one thing we are certain that we don't need would be trips to the movies and going out to dinner or theme parks. That doesn't mean we stop living life and rewarding ourselves, it just means we limit it. Maybe wait until you've caught up on your bills before going out; until then, watch movies for free on TV. If a trip to the movies is feasible considering your spending plan, then account for it and put it in your plan. Remember, you are designating funds before spending – no more credit cards.

5.) Spring Cleaning = CA$H

If you don't need that old couch in the garage, why not get some extra cash by selling it? Those clothes you haven't worn in a year – sell them! You've likely acquired more stuff from Christmas, so out with the old and in with the new and make some extra cash. Ebay.com and craigslist.org are great places to start selling those unwanted/unneeded items. Even gifts you've received that you don't need can be sold or returned for useful cash. You can use this unaccounted cash for paying down debt so you will be that much closer to your goal of being debt free, self sufficient and even saving funds to build your future or whatever your goal may be.

6.) Prevent the New Year's Holiday debt and Plan NOW

Go to your bank and as one of your New Year's resolutions, start a Christmas Club or other holiday account. If you struggled to purchase presents this Christmas or used your credit cards to buy presents, this is a sure way to avoid the stress and debt this coming Christmas. A little bit goes a long way. If you choose for the bank to reserve $50 each month into your Christmas club account, you will have saved $600 by next Christmas – wouldn't that have come in handy? If you generally get a company Christmas bonus then you don't have to wait for that in order to shop and when you receive it, put it back into your Christmas club account for the following year. Start today for peace of mind next Christmas.

7.) Taxes used Wisely

If you are one of the lucky few that receive a refund when you do your taxes then choose to use it wisely. Instead of thinking about that big screen TV or that trip to Hawaii that you don't need, plan to use that money wisely and get yourself out of debt when it's most feasible. Before touching a penny of your taxes, account for where this unexpected cash can most benefit you and don't spend it on stuff you don't need. First, pay yourself and that means put a portion in a savings account you cannot easily access. Pay down a credit card or two and you could even put some into your Christmas Club or other holiday account so you don't have to pay it monthly. You have grasped the full understanding of the value of money when you can take care of business before buying more stuff you really don't need, and before you know it, the pangs of holiday spending will eventually disappear.

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