Five Smart Ways to Spend your Holiday Cash

We’ve survived the holiday season and it’s time to think about 2014. If you were lucky enough to receive the gift of cash, what will you do with it? Don’t splurge on something that you will forget about in a month. Use your monetary presents to help you climb out of debt.

  1. Catch up on payments. Medical bills and mortgages are reported by credit bureaus and impact your credit score. Paying off these debts helps protect your credit score and lessens late fees. This isn’t the most exciting way to spend your holiday money but this will lower your minimum payments and help you get out from under that heavy blanket of debt.
  2. Pay off debts with high interest. Credit card bills and car notes carry high interest costs that can drain your bank account. Pick out the bill charging the highest interest and pay it off. Eliminating one bill will keep the interest from piling up.
  3. Save for a rainy day. Life can throw you all kinds of curve balls. People get sick, cars break down and jobs can be lost. Squirrel away some money to help you survive these hardships. The average duration of unemployment is six months. You should have enough money saved to cover basic living expenses for that time.
  4. Use gift cards wisely. 80% of shoppers purchased gift cards this holiday season and while they work just like cash, collectors won’t accept them as legal tender. But they can help you manage your spending. Use gift cards to purchase essential household items such as detergent, trash bags or shampoo. Take the money you would spend on these products and pay if toward your debt.
  5. Start holiday shopping early. Now is the time to begin shopping for the holidays. Many items are still on sale and you will avoid all of the Black Friday and holiday crowds. The popular gifts that were difficult to find are much easier to get your hands on now. Go ahead and get started now to avoid the stress and cost of last minute shopping.

Follow these steps and get 2014 started on the right foot. If you got cash or a gift card instead of that fancy new gadget this year, don’t waste the opportunity to start getting out of debt for good.


Martin Sher is CEO of AmSher Collection Agency and a recent past president of ACA International, the Association of Credit and Collection Professionals.  Martin is the author of the 54 word Collector Pledge, committing credit and collection professionals around the world to the ethical and respectful treatment of all consumers.  Martin’s personal mission is to get 5 million people out of debt-for good, and for FREE.

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