Tackle post-holiday debt before it drags you down

Post-Holiday Debt

As much as the holiday season is a time to look forward to vacation days, festive treats, and quality time with the family, it can also come with a nasty surprise: post-holiday debt. From gift shopping to groceries for that special festive feast, there’s always some sticker shock when you see your credit card debts after the holiday.

Staring down high credit card balances is never a good way to start the New Year, but it happens. When it does, you’re going to want to tackle your post-holiday debt quickly, before the problem gets worse and drags your finances down.

The longer you carry a balance, the more you’ll wind up paying in interest. A high balance can also stretch your budget, making it a challenge to keep up with other expenses like your utilities, internet, phone bills, or car payments.

Before holiday spending affects your finances for the rest of the year, these are some strategies you can use to take debt down fast. It’s time to start your plan for debt freedom.

#1 Rebalance Your Budget

Holiday spending can put a real dent in your budget if you haven’t planned ahead and set aside extra funds for the season. In the wake of the holidays, it’s time to rebalance your budget and prioritize paying your bills. Here are a few easy targets to cut from your monthly spending:

  • Takeout or eating out;
  • Discretionary spending (such as new furniture or unneeded new clothes);
  • Entertainment costs.

#2 Seek Credit Counselling

You’ve rehashed your budget over and over, but you just can’t make it work. Whether you’re faced with the possibility of missing a payment or you’re barely making progress, certified Credit Counsellors from a non-profit credit counselling agency can help.

One of your options to get out of debt is a Debt Consolidation Program. This is a useful alternative to debt consolidation loans, especially if you’re rejected for one or you can’t find an option that offers lower interest rates. In a Debt Consolidation Program, a certified Credit Counsellor renegotiates your debts with credit card companies and other unsecured creditors, reducing (or eliminating) interest charges. Talk to a non-profit credit counselling agency like Credit Canada for help.

#3 Focus Your Repayments

Are you juggling balances on multiple cards? Identify which one has the highest interest rate and focus your repayments on that one. Make sure you keep up with minimum payments on all accounts but make more than the minimum with the most expensive balance you carry.

Once you knock out one of your debts, you’ll have more money (and motivation) to focus on the rest. Always pay more than minimum if you want to make real progress.

There are other things you might be able to do to make more progress, such as selling belongings or finding additional income, but your best option should be finding ways to redirect your spending and reducing or eliminating your interest charges. Don’t let holiday spending get in the way of your financial success!

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