CLEVELAND — The holiday madness is over but the so-called holiday debt hangover is just starting for many Americans.
The average person racked up $1,325 in debt during the holidays, according to Magnify Money. Sevent eight percent of those surveyed felt they wouldn’t be able to pay off their balances by the end of January, which means interest will be added to those bills.
Anuj Nayar, a financial health officer at LendingClub, said “you try to put a budget together, you got all your gifts set up … then all these extra expenses come in, you go to a couple of dinners, maybe paying a new outfit for New Year’s and before you know it, you’ve blown through every budget you could possible have, then you’re stuck in the debt trap.”
Avoidance is not the answer. It'll be jarring but Nayar says you have to open those credit card statements and figure out how much you can afford to pay each month. Also, monitor your progress with a “money diary.”
Turning to technology could help you get back in the black, too. Nayar says there are apps that’ll help you make extra money easily, “If you love kids, there’s one called SitterCity, you can pick up babysitting gigs or if you love dogs, there’s one called Wag.”
Look for apps to help you set aside money to pay off the bills. Digit monitors your income and spending habits and starts socking away a few dollars whenever it thinks you won’t miss them. It will also divvy up the money in categories like travel, phone bill or rainy day.
If you’re in a lot of debt, Nayar says consider consolidating it, “we recommend a personal loan, we (The LendingClub) have a fixed-end date and fixed payments every month versus no end date and a changing interest rate.”