Cutting Down Debt

Well some of us may have spent a little too much this holiday season. Maybe we splurged on a gift, or a dinner with family, and now the credit card bills are starting to come in. It can be overwhelming to figure out how to pay it down. Financial professional Dale McCarty, President of Retirement Designers Financial Group, has steps to help you get out of holiday debt.

1. What advice do you have for people wanting to get rid of credit card debt from 2018?
- The first step is to organize your debt. Make a list of all your debts.
- Start with looking back at how 2018 was – did you have a budget? Did it work? What expenses will you have in the New Year?

2. Is it better to pay off the biggest balance first or smallest?
- Then it can be important to make a plan to start paying it off. Try and pay off the card with the smallest balance first. By doing that, you could be able to eliminate carrying a balance on one card and that will give you a feeling of accomplishment to keep paying down your other debts.
- However, it is also important to focus on cutting expenses to bring debt down as soon as possible. The longer debt is unpaid, the more you could pay in interest charges. Interest payments can quickly become expensive. For example, the average credit cards have an APR, or interest rate of, 17 percent.

3. Should people just focus on paying off debt first or what about putting some money aside as well?
- It can be important, that no matter the age, you have a savings cushion fund in case of unexpected expenses. You can start saving any time. Something is better than nothing.
- Try and stop adding to your debt. Try not to charge anything else to your cards.

4. What other ways can shoppers cut costs to avoid debt in the next holiday season?
- One way to stick to your budget is to look for deals. By shopping around and starting early, you can even potentially spend under your budget.
- Be looking year-round. Buying items in the off season (i.e. swimwear in the winter) can also help reduce sticker price.