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Exploring Womanhood > Heart of the Home > Family Finances > Financial Planning

Repaying Christmas Bills
by Gary Foreman

Starting off the new year with leftover Christmas bills? Wonder how you'll pay them in this tight economy? Well, you're not alone. Most years the average consumer hasn't finished paying his holiday credit card bills until May.

But, it doesn't have to be that way. Let's see what we can do to get out from under those holiday bills. Let's take a two step approach. First, we'll look at some techniques that could take a big bite of the debt. Then we'll follow up with some slow but steady solutions.

The first method is for people who have equity in their home and have not already refinanced. If your mortgage rate is at 6.5% or higher a refinance could reduce your monthly payments. We're not suggesting taking equity out of your home. Just use the monthly saving to pay down the credit card bills.

Another one shot solution is to reduce the cost of home or auto insurance coverage. You could save hundreds. Begin by calling your current agent and ask if he has any suggestions on changes in coverage. Then get comparable quotes from two other companies. A few phone calls could turn up serious savings! You can find information on auto insurance from Edmunds.com here . For homeowners' insurance, you'll want to contact a couple of local agents.

Finding savings on a monthly basis is harder, but still possible. Begin by taking a look at where you spend your money. Review your credit and debit card statements. Your checkbook, too. If you're like most families you'll see certain bills repeating. Those are prime candidates. Which ones can you eliminate or reduce until holiday debts are repaid? Eliminating services like cable TV will save you money each month, and will also encourage you to get the debts repaid so you can begin watching some of those favorite shows again.

In your review of your bills you probably noticed that you spend a lot on food. Not only at the grocery store, but in the cafeteria at work, fast food joints and even convenience stores and coffee shops. For most of us it totals about 20% of our monthly expenses.

The advantage of reducing food expenses is that you have opportunities to save every day. And many of them will have little impact on your lifestyle, but the savings add up quickly.

Here are a couple of techniques you can try:

  • Decide to avoid restaurants. If you're really dedicated, skip take-out food as well. You'd be surprised how easy it is to cook at home if you make use of your slow cooker, microwave and freezer.

  • Swap generic for branded goods. You might miss some favorites. But you might also discover some generics that you even prefer to the old brands.

  • Take snacks and coffee to work. It might not seem like a lot, but those coffee breaks can add up to $3 or $4 each day.

  • Eliminate food waste. Studies show that we throw out about 15% of the food we buy because of spoilage. Have plans for the food your buy and for your leftovers. Those science projects in the back of the fridge are expensive!
Next, consider creative methods to save. Have you ever thought of carpooling or giving up club memberships? Don't assume that you can't live without a product or service. Consider how you'd adjust if it were not available. You might find ways to save that weren't obvious.

Finally, don't worry about the bills. Rather celebrate the fact that you're taking positive steps to eliminate them. And, don't forget to celebrate each step towards financial independence.

About the Author:
Gary Foreman is the editor of The Dollar Stretcher.com website and newsletters. For more information about cutting expenses read about living on a bare bones budget.

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