The eggnog is gone and the afterglow of the holiday has waned, but the credit card debt you accrued over the shopping season is here to stay. If you overspent during the holidays, you’re not alone. Badcredit.org reports that 43% of Americans in 2019 said they’re likely to spend over budget during the holidays. So, you might be asking yourself: ‘How do I pay off holiday debt?’

Don’t let financial anxiety ruin the joy you felt during the holiday season. There are ways to combat debt, one step at a time, and get you back on the right track for a financially healthy 2021.  

Financial Overview
Start by going over all your finances, including monthly household expenses, groceries, upcoming appointments or maintenance, phone bills, and your total credit card debt. Once you have it all spread out before you, you can decide what expenses can weather a cutback. While letting go of a cable channel or cutting out takeout for the month may be hard, you can effectively cut your expenses and direct more funds towards paying off your debt.

Recreation & Leisure

While recreation is necessary for mental and physical health, try finding activities you can do that cost little or nothing. This can mean taking a hike in the great outdoors, going to a library, ice skating, or crafting at home. These activities are not only fun and relaxing, but they will help you save a significant amount of money over time – setting you up for financial success.  

Paying it Back

Once you’ve figured out what expenses you can cut back on, it’s time to decide how you want to pay back your debt. There are tactics you can use, such as the aptly-termed “debt avalanche,” which means putting more money toward the card with the highest interest rate until it’s paid off, then taking that money and putting it toward the card with the next highest interest rate, in addition to the payment already on that card. In this way, you can pay off credit cards more efficiently. Other ways to reduce your credit card debt is to focus on paying off the card with the lowest amount first and then directing your focus onto the next one after that. Whatever way you decide to attack your debt, outlining a clear plan will give you a sense of control over your financial future and alleviate anxieties.

Cash Avenues
Experts advise that one way to navigate debt in the new year is to set aside any holiday bonuses and tax returns toward paying off credit cards. Additionally, if you have any unwanted gifts that you’re able to return, you can set that money aside for your debt repayment as well.

Debt Management Program

Despite all these steps, don’t suffer in silence if you’re still struggling. Reach out to a debt counseling licensed professional to go over your options and get started in a debt management plan. Your credit counselor can work with creditors to consolidate your debts, lower your interest rate, and negotiate a monthly payment that is customized to your financial situation.

Once you’re on your way to paying off your holiday debt, consider starting a holiday fund so that when December comes next year, you’re prepared and facing a financially healthier future.


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