Listen up. Still feeling that holiday glow? Will you still feel it when the bills start hitting your mailbox this month?
If you spent more than you could afford, start tackling the pile (or mountain) of debt.
Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, advises setting a goal now to pay off your holiday bills by the end of March.
For most people who can't pay them off immediately, that means either boosting your income or cutting expenses, or both.
• You got a raise on Jan. 1. Compare your net pay from your last check in December with your net pay for your first paycheck in January. Set aside the extra amount from each paycheck and put it toward your debt. You lived without that extra money last year, didn't you?
• Consider a temporary part-time job to earn extra cash.
• Be creative in finding ways to pay off the debt. Cunningham suggests, for example, that if you received gift cards that are not store-specific, put them toward groceries and other essentials. Then apply that amount toward paying off your credit card.
• Look around the house for things you don't want or use — maybe you received some dud gifts — and sell them at an online auction or yard sale, or take them to a consignment shop.
• Cut expenses. Cunningham suggests tracking everything you spend for 30 days so you'll clearly see where your money is going. For example, you may be paying an average of $20 a week for your daily cup of coffee at your favorite coffee shop. If you make your coffee at home, or can stomach the free java at work, you could save $80-$100 a month. Put that money toward your debts.
• Pay only with cash or debit cards, at least until the debt is paid off.
• Ice your credit cards and stop running up even more debt, Cunningham advises. She suggests dropping your credit cards in a bowl of water and freezing the bowl. That way, if you see something at the mall you think you really want, but don't have the cash for, you must drive home and thaw out the card — which gives you time to ponder the question: Do I need it?
• Do not miss a payment. "People think they will pay next month, because they don't have the money this month," Cunningham said. But if you don't pay your bills on time, you could damage your credit rating.
• Open bills immediately. Keep track of when they're due, perhaps making a note on your calendar when you need to mail the payments or pay online. With late-payment fees hovering around $40, Cunningham said, this helps you avoid piling on even more debt.
Also check carefully to make sure the bills are accurate. You don't want to pay for something in error.
Don't think that just because your spouse is deployed, you don't need to open bills.
• If you are deployed, you may be able to get your interest rate lowered. The interest rate for the Military Star card, the common credit card for the military exchanges, can be reduced to 6 percent for those who are deployed, with the proper paperwork.
For other credit cards, if the debt was incurred before you entered active duty, the bank or credit card company must reduce the interest rate to 6 percent if your service results in an adverse change in your financial situation — i.e., you're making less money.
That applies to National Guard and reserve members who are activated. It applies to active-duty service members only if the debt was incurred before they joined the military. But it never hurts to ask for a reduction in your interest rate, whatever your circumstances.
• If you have trouble paying bills, get help. Personal financial managers on military bases provide free counseling. You can find them through your family centers on base. Military relief society chapters on base — Army Emergency Relief, Air Force Aid Society, Navy-Marine Corps Relief Society, Coast Guard Mutual Assistance — also offer counseling and assistance, such as interest-free loans or grants. You can also seek assistance at http://www.usacares.us">http://www.usacares.us or http://www.operationhomefront.net">http://www.operationhomefront.net.
Military banks and credit unions may also offer counseling.
More than 900 nonprofit consumer credit counseling agencies offer free or affordable confidential counseling as members of the National Foundation of Credit Counseling. To find one near you, visit www.nfcc.org">http:// www.nfcc.org or call (800) 388-2227.
When it comes to debt, Cunningham said, "Don't bury your head in the sand — face up to it."
Got that? You're good to go.
The military community offers many ways to get free personal finance and debt management advice. Some places to start:
• Personal financial management advisers, generally found through installation family centers.
• Military OneSource, http://www.militaryonesource.com">http://www.militaryonesource.com, (User ID: military; Password: onesource) or toll-free at (800) 342-9647. Ask your question, or get material on a variety of topics, 24 hours a day.
• Military credit unions and banks, which have agreements with installation officials to provide free financial education to service members. Military-affiliated financial institutions outside the gate also offer budgeting and other personal financial planning help.
• Military relief societies, which can provide budget counseling along with, and also interest-free loans or grants for emergency assistance.