4 steps to take this Valentine’s Day to get out of debt
While Valentine’s Day can certainly be a very exciting time for individuals, other times it can cause some unwanted stress. Perhaps the source of your stress is trying to find a romantic gift for your significant other that truly shows them how you feel and how much they mean to you . . . and let’s face it this can cause us a little bit of added pressure.
Typically, roses, chocolates, flowers, jewelry or accessories may be the direction your mind tends to go when you think about the types of gifts that are appropriate for this time of year. However, another way to look at things is to think about what your partner really needs and what may really help them out in their current situation.
Therefore, another take on this traditional ‘holiday’ could be to help your loved one relieve some of their financial difficulties and get out of debt. Of course this may not be the most obvious ‘gift’ you can give them, it can however help relieve their stress and make them a lot happier. After-all, both of your goals around this time of year, as well as all throughout the year are likely to make each other happy – so in the end this seems like a really suitable and yes, even a romantic Valentine’s gesture. Here are 4 steps to take this Valentine’s Day to get yourself – or your partner out of debt.
1) Examining the Amount of Debt
This first step is perhaps the most obvious of all steps, however it is actually one of the most important. Unless you know exactly how much debt, as well as the nature of the debt, then you can not come up with an effective plan to try and pay it off. Looking closely at the specific debt obligations can help you both identify key information such as interest rates, total balances, as well as all of the expenses – necessary and unnecessary. A second part of this step is to also include the amount of income they have coming in, as well as when the money is expected to arrive. This is setting the stage for being able to look at the most effective ways that they can save money – as well as where they may be able to step up the pace and/or the efficiency of their debt repayment.
2) Creating a New Budget
Secondly, key to any repayment plan/savings plan is to recreate a budget that will help the individual make an impactful financial difference moving forward. From the budget, they should be also to see areas where they can cut back and save money. Some of their current expenses may be reduced by purchasing alternative products at a lesser price, buying in bulk – or in general just adjusting shopping routines and behaviours, just to mention a few. As well some expenses can be eliminated all together – or at least not purchased as frequently. For example, your partner choose to eat out less often, stay home and cook more meals, they can cut back on certain services, such as cable, hydro, internet, phone, etc.
While some of these ideas may only amount to small savings here and there, they can free up some additionally money that can be used to pay down debt instead. The trick is to find what works best for the situation at hand – and where your significant other can afford to cutback versus the purchases they can’t realistically avoid. Together you can prioritize these expenses and see which are the more feasible.
3) Prioritizing the Debt
Next up is to look at singling out which debts will take priority over others. While there are various ways of ranking these, often people who are initiating debt prepayment plans will start with the debt that has the highest interest charges. Sometimes, this will mean the credit card or loan with the highest interest rate, but other times it may also mean the debts with the highest balances. Either way – each of these scenarios will translate into exorbitant interest fees each month.
Plenty of times, it is the interest rate that makes it extremely difficult to make a dint in our debt payments. This is because while we continue to make payments on time, each month, often this only covers the interest payments and the balance itself continues to creep higher. Overall, by helping your significant other organize their debts, and come up with a plan for which area to attack first, this can certainly set things in motion for getting out of debt much quicker.
4) Contacting a Debt-Relief Specialist
This final step can be effective in helping your partner devise a plan that will also enable them to start paying off their debts faster. While you may have both taken yourselves this far, sometimes having additional support from an expert in this field can speed this process up further. By suggesting that your significant other consult a debt relief specialist, this service can provide insight into which specific debt relief payment strategy may be the most successful of all for them.
For example, some times consolidating loans may be the best move, while other methods can look at switching to a different type of credit card. Additionally there are also ways of adjusting your payment plans that can be a) more manageable for you and b) can also help you pay off more of your debt. Ultimately, if you are unsure of which solution is the best option, together you can seek out the professional expert advice you need.
Special Bonus Step: Minimize the expenses this Valentine’s Day
With both of you already on the same page in terms of finances, and the plan to relieve debt, it shouldn’t be too much of a hardship to lower the amount of money that you spend on Valentine’s Day this year. There are still ways to make it a special occasion without going overboard. For example, you can save money by staying in and cooking a meal. Have a plan for even ordering in your favourite food. Take out food doesn’t have to be too expensive, yet you won’t have to pay for the tip or make a reservation in a crowded place.
You can also make your own gifts for one another – a homemade card, a letter or a poem or even a craft if that is something that is up your alley. Even if you do plan on purchasing a gift for one another, you can set a price limit and save some extra money as well that way, yet still make it a meaningful and memorable experience.
As financial worry can be one of the leading contributors of stress and unhappiness – why not help your partner make a conscious effort and get rid of their debt. Chances are they will appreciate it more than you know – and while you’re at it you can also throw in some chocolates or another special little surprise for them to top it off!