How to Cure Your Holiday Spending Hangover

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This is likely the week you’ll receive your credit card statement with all your holiday spending from December. If you were wise, you budgeted for Christmas all year and can pay off the balance with money you’ve set aside in a savings account. If you were a normal person, you’re probably grappling with a few hundred or few thousand dollars that you now need to find a way to pay off.

Getting a bill for items you gave a way does not generally fill you with the warm and fuzzies in the dark cold days of January, but it doesn’t have to mean the new year is off to a bad start. With some careful planning and discipline, you can be holiday-debt-free in a short time — and ready for next Christmas.

Face the bills

The first thing you need to do is open your credit card bills. All of them. List your debts in a notebook or a spreadsheet, along with interest rates and minimum payments so you know exactly where you stand.

If you want the tools to get organized, check out my free Debt Crusher eCourse, which provides a step-by-step guide and all the worksheets you need to manage your debt.

Determine how much you can afford to put towards debt

One of the most annoying aspects of getting rid of unexpected consumer debt, is doing so will require you to take money away from your other financial goals. Unless you’re able to earn more money to pay the balance off, your only solution is to put other financial goals on hold while you get to debt free.

Going back to making the minimum payment on your student loans or skipping adding to your vacation fund might feel painful, but carrying unwanted consumer debt at 20% interest hurts much more! Remember your situation is temporary, and commit to focusing on what’s most important: getting rid of this debt as possible.

Cut back on frivolous spending for 2-3 months

One of the good things about the holidays is you probably received a lot of great gifts — which means you don’t need to do much shopping over the next few months. Try to cut back on making purchases like new clothes, electronics, and home decor until you have more money in your budget. You can take this a step further and try a no-spend month (or three!) where you only focus on spending on necessities. It might seem extreme, but you might not have a choice! Besides, you probably bought 3 months of goodies already.

If you can’t go entirely without anything new, at least try to reduce miscellaneous costs like dining out. Being able to make even as little as an extra $100 payment on your credit card debt will make a big difference in getting you to debt free.

Make a plan for next year

If the debt you accumulated from overspending is causing you a lot of stress, the last thing you want to do is repeat your mistakes next Christmas!

However, one of the perks of your credit card balance from this year is you have a relatively good idea of how much you spend each holiday season. Now this becomes the amount you need to save. You can start saving while you pay down your debt, but that might be too many demands at once. Instead, make your savings plan start in June or July, and commit to saving a small amount, such as $25 or $50 per week, into a savings account for next Christmas.


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  1. So much yes for making a plan for next year. We spent $800 on the holidays in 2015. That was much too steep for us, so we made a plan last year to make DIY gifts and pay off presents with credit card rewards. Our budget impact for the 2016 holidays was a mere $50, which was amaaaazing.

    We didn’t have to deprive ourselves or scrape by during January to make up for December’s spendyness. It sucks, but the best way to make up for the holiday spending hangover is to prevent future ones from happening.

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