How to tackle debt in the new year

(Photo credit: WTEN)

HAMDEN, Conn. (WTNH) — We all know tackling debt can be scary and that’s what many of you may be trying to do this New Year. So we came up with a few ways to bring that debt down and maybe add money in your pocket.

If you started the New Year with a mountain of debt, you’re not alone. Jim Horan with the CT Association of Human Services says half of the households in our state are facing debt, most around $6,000.

So, how do you start getting it down?

First, take a hard look at your budget.  If you don’t have one, it’s time to make one. Find something you can give up at least partially; maybe bring a lunch twice a week instead of buying every day.

Think about transferring debt to a credit card offering no interest for a year, but come up with a plan to pay it off! Interest could be higher on it next year if there’s still a balance.

Horan also reminds you to take advantage of tax season.

“If you’re going to get a refund, apply that money to your debt and for folks who are lower income, under about $55,000 a year, you can get your taxes prepared for free,” he said.

Here’s another idea, If you have any household items you’re not using anymore, or how about those cute clothes your kids only wore a few times. Consider consigning them, put a few extra bucks in your pocket.

The owner of the Good As New consignment shop in Hamden, Susan Fasulo-McPherson, says if you play it right, you can get pretty good money back.

“You can get anywhere from $50, we have some people who collect $150-$200 a week. Other people just gradually build it up,” she said.

Another idea: take your information off retail websites so it’s not so easy or tempting to charge something and hold off on opening new accounts until your finances are under control.

If you need more help, there are workshops happening around the state where there are people who can help you.

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