Are Spooky Financial Ghosts Groaning In your Attic?

Who among us has never been haunted by the ghosts of bad financial choices past?

In this season of goblins, demons and pumpkin spice, nothing induces a blood-curdling scream as quickly as a bill for that credit card with the super-high interest rate, or that automatic monthly debit for the gym you never use.

But fear not: As one well-versed in the art of awful money choices, I am here to help you bust the spooky spirits groaning and moaning in your financial life.

Haunted by: pricey student loans

Student loan debt can be quite a nightmare. It’s true that a useful education is a fine investment. But perhaps you took out a student loan you didn’t really need, over-borrowing to cover some not-so-necessary expenses like that luxurious California king futon from grad school. Or perhaps you’ve simply been screwed by a company that preyed on your lack of financial education to lock you in for what feels like a lifetime of debt. This isn’t about shame or blame—it’s about looking at what happened and dealing with it in the present day.

There are various methods for reducing your burden, but first, make sure you actually know what all your loans are. (Ordering a free credit report is one way to find out.)

Here are just a few ways that may help ease your burden:

Pay more than the minimum
It may seem impossible. But chances are you can pay a tiny bit more each month, and lessen the length of your unholy marriage to the student loan company. Here’s an example, citing information from the financial lender Sallie Mae: “If you owe $10,000 and have an interest rate of 8% annually, it will take you ten years to pay off your loan, assuming minimum payments of $121.32 a month…But if you bump up your monthly payment to $141.32 (just $20 more), you’ll pay off your loans in eight years, or two years earlier, and will save yourself close to $1,000 in interest payments.”

Make extra payments
Again, may seem impossible. But what if you assemble $20 worth of couch change and car change and back pocket dollar bills gleaned from the laundry? That’s an extra payment. Get some money back at tax time? That’s an extra payment. Sell your clothes at the consignment shop or on eBay? That’s an extra payment. It all adds up.

Also, remember to include your student loan interest with your annual taxes, as you may be able to deduct some or even all of it.

Haunted by: too many credit cards

You know how gremlins multiply? Yeah, that. Some financial coaches will tell you to pay as much as you can each month on your card with the highest annual percentage rate, and then stick to the minimum on the other cards until you’ve got that big guy paid off. Others encourage you to pay off the lowest balance first, using the debt snowball method.  You can see if any of your cards has a 0% APR balance transfer offer, and shift some money accordingly. There may be fees involved even if the APR is 0%, so be sure to check with your individual credit card company. You can expect to be charged 3 to 5% of the amount you’re transferring. Once you’ve got a card paid off, you may wish to cut it up but leave the account open. Part of your credit score is determined by the length of your active accounts. But ultimately you’ll probably continue accruing debt as long as you keep using those credit cards. If you need help with debt like this, consider a program like Debtors Anonymous.

Haunted by: skipping the 401(k)

So you never enrolled in a 401(k) and matching funds when you had the opportunity. Or you’re an independent contractor without any retirement savings. Hey, it’s never too late to start! Educate yourself on options for retirement savings—opt into your company’s plan, choose your own IRA, or enroll in another type of fund—and put in a little bit each month as a start.

An IRA is available to almost anyone with a taxable income, and can be a particularly great option for a freelancer/independent contractor. A Traditional IRA allows you to make regular contributions on a pre-tax basis. You’ll have to pay taxes on the total amount when you withdraw – but you’ll be hit with major fees if you withdraw before the age of 59 ½. A Roth IRA is a bit different – you can make contributions after taxes have been deducted. You generally won’t have to pay taxes or fees when you make a withdrawal, so long as you’re 59 ½ or older.

Thanks to the power of compound interest, your relatively small contribution to a retirement fund can yield big savings over time. After all, a little Halloween candy in your puffy paint-decorated pillowcase is better than none.

Haunting by: recurring debits for stuff you don’t use

Around here, we call it sleep spending. Maybe you’re not that into your meditation app, or your gym, or those boxed meal kits you never actually use. Quitting is (usually) relatively easy. Granted, your gym will probably push back at you if you’re locked into a one year program, but a relentless dedication to polite but firm communications with customer service can often at least knock a few months off the thing.

Looks like it’s your turn to haunt somebody, baby!