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5 Ways to Nurse Your Holiday Spending Hangover

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At the end of 2016, a quarter of consumers said they expected to rack up holiday debt. Of those shoppers, 66 percent said it would probably take them three months or more to pay it all off. That’s a lot of shopping.

“Most, if not all, of us have been there,” says Ryan Frailich, a Financial Planner in New Orleans. “We forgot about four people we needed gifts for and underestimated how expensive traveling would be. Before you know it, our December credit card bill is double what we expected. The good news is, for many, this is manageable.”

If you’re in a post-holiday spending haze, your first order of business is to come up with a solid debt payoff plan. Beyond that, here’s what you can do to fix your finances now, supercharge your debt payoff, and prepare your budget for next year’s spending craze.

1. RETURN STUFF YOU DON’T WANT.

Whether it’s a top that doesn’t fit or a camouflage-patterned Snuggie you'll never use, try to return any unwanted gifts and gift cards you received this year, says Kendal Perez of Coupon Sherpa.

“Return them for cash and use the money you receive to pay down your holiday debt,” Perez says. “If you don't have a gift receipt and receive store credit for your return, you can sell your gift card through sites like GiftCardGranny.com for up to 90 percent of the card's value in cash.”

2. FIND WAYS TO EARN EXTRA CASH.

It’s easier said than done, but a side gig or two could really boost your debt payoff goal. “Love dogs? Dogsit your way to being out of debt," says Frailich. "Got an extra room? Airbnb can bring in great cash flow for a short period of time if you need it. Find a way to boost your earnings so you can rid yourself of the debt ASAP.”

When you're using your extra cash to bail yourself out of debt rather than, say, buy a new pair of sneakers, the money doesn't seem to go as far. “Once people are in debt, an extra $300 doesn't feel as big as when they were debt free,” Frailich says. But this is precisely when every penny matters. As your debt increases, so does the interest you rack up. As you pay down your principal balance, even if it’s by a small amount, your interest payments will also decrease.

3. GO ON A SPENDING FAST.

“Try a ‘no spend’ month, where you stay away from restaurants and movie theaters and stay home for a month,” says Craig Dacy, a Financial Coach.

Most "no spend" months involve cutting non-essential expenses—like entertainment, shopping, and meals out— so you can funnel those funds to your credit card bill instead. Perez adds that some extreme participants also cut their grocery spending for the month and eat what’s already in their refrigerator or pantry. For this stricter approach, Dacy recommends using Supercook, a web app that generates recipes based on what you already have at home. (You can use an app like this to help you shop smarter, even if you're not drastically limiting your grocery budget.)

“Identify what structure works best for you to yield the most savings and apply your ‘extra’ cash toward your holiday credit card bill,” Perez says.

4. TRANSFER YOUR BALANCE (CAREFULLY).

And then there’s the balance transfer hack. You transfer your credit card debt to another card that offers a promotional 0 percent interest balance transfer. With these promos, you have a certain amount of time—usually six months or a year—to pay off your balance before you start accruing interest.

“If you have a high credit score and are eligible for a 0 percent balance transfer, it may be a good strategy to use in this one instance, as long as you are absolutely certain you can pay off the full balance during the 0 percent term," Frailich says. "Be careful, though, because if you don't pay it off in full during that window, you'll pay even more in credit card interest than on your original card.”

Not only that, you also want to watch out for deferred interest credit cards. These cards offer similar terms to 0 percent interest balance transfer cards, but if you don’t pay the full balance by the end of the promotional period, you could end up owing interest retroactively. Be sure to read your credit card’s terms and conditions thoroughly before committing to anything.

5. SAVE NOW FOR NEXT YEAR.

Finally, prevent another hangover by preparing for next year’s spending as soon as possible. The holidays catch people off guard, but they really shouldn't—they’re right there on the calendar. Holiday gifts and travel are predictable expenses you can budget for now.

Frailich describes a client who consistently overspent and racked up debt every January. After paying off the previous year’s debt in April, she started automating a $50 transfer from each paycheck into a savings account dedicated to holiday spending. “When the time for gift-buying and traveling came, she already had $800 set aside, so she was able to handle almost all of her costs with that money. Going forward, she is continuing her automated savings so she'll be ready next year to handle the full holiday expenses with money she saved ahead of time.”

Another suggestion to consider: You don’t have to spend so much on the holidays to begin with. Lay out your spending limits and expectations beforehand so you’re not frantically spending on last-minute gifts. “I know some families who do a drawing and each person only buys and receives one or two gifts per year rather than facing an endlessly growing list of people to shop for,” Frailich says.

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Live Smarter
These Are the Top 25 U.S. Cities With the Lowest Cost of Living
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Coastal cities like New York and San Francisco bustle with excitement, but residents pay plenty of hard-earned cash to enjoy perks like Central Park and world-class museums—and to pay their sky-high rents. If you’d rather have a full bank account than a hipster ZIP code, consider setting down roots in America’s most affordable region: the Midwest.

Niche, a data analysis company, has ranked the 25 cities with the lowest cost of living across the United States—and the top 10 are all located in America’s heartland. Their selections were based on factors including access to affordable housing, food and fuel costs, and median tax rates, all of which were gleaned from U.S. Census and Bureau of Labor Statistics data.

Indiana was the most-represented state in the list’s top 10 section, with Fort Wayne, Evansville, and South Bend nabbing the first three spots. The remaining cities were mid-sized metropolitan areas in Kansas, Ohio, Iowa, and Illinois, all of which offer urban conveniences at a fraction of the cost of their coastal counterparts. After that, other cities in the mix included municipalities in Texas, Michigan, Alabama, South Dakota, and Minnesota.

Check out Niche's top 25 list below, and visit their website to view their methodology.

1. Fort Wayne, Indiana
2. Evansville, Indiana
3. South Bend, Indiana
4. Topeka, Kansas
5. Toledo, Ohio
6. Wichita, Kansas
7. Akron, Ohio
8. Cedar Rapids, Iowa
9. Davenport, Iowa
10. Springfield, Illinois
11. Rochester, Minnesota
12. Dayton, Ohio
13. Springfield, Missouri
14. Wichita Falls, Texas
15. Kansas City, Kansas
16. Odessa, Texas
17. Cleveland, Ohio
18. Indianapolis, Indiana
19. Abilene, Texas
20. Sioux Falls, South Dakota
21. Montgomery, Alabama
22. Lansing, Michigan
23. Des Moines, Iowa
24. Brownsville, Texas
25. Warren, Michigan

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Weird
Switzerland Flushes $1.8 Million in Gold Down the Sewer Every Year
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Switzerland has some pretty valuable sewer systems. As Bloomberg reports, scientists have discovered around $1.8 million worth of gold in the country's wastewater, along with $1.7 million worth of silver.

Scientists at the Swiss Federal Institute of Aquatic Science and Technology examined sewage sludge and effluents, or discharged liquid waste, from 64 water treatment plants and major Swiss rivers. They did this to assess the concentrations of various trace elements, which are "increasingly widely used in the high-tech and medical sectors," the scientists explained in a press statement. "While the ultimate fate of the various elements has been little studied to date, a large proportion is known to enter wastewater."

The study, which was recently published online in the journal Environmental Science & Technology, revealed that around 94 pounds of gold makes its way through Switzerland's sewage system each year, along with 6600 pounds of silver and high concentrations of rare metals like gadolinium and niobium. For the most part, these metals don't harm the environment, researchers say.

With gold and silver quite literally flowing through their sewers, is there any way that Switzerland could turn their wastewater into wealth? Scientists are skeptical: "The recovery of metals from wastewater or sludge is scarcely worthwhile at present, either financially or in terms of the amounts which could be extracted," the release explains.

However, in the southern canton of Ticino, which is home to several gold refineries, the "concentrations of gold in sewage sludge are sufficiently high for recovery to be potentially worthwhile," they conclude.

Switzerland is famous for its chocolate, watches, and mountains, but it's also home to major gold refineries. On average, around 70 percent of the world's gold passes through Switzerland every year—and judging from the looks of it, much of it goes down the drain. As for the sewer silver, it's a byproduct of the chemical and pharmaceutical industry, which is a cornerstone of Switzerland's economy.

[h/t Bloomberg]

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