Debt Piled up Over the Holidays? Here’s How To Get Back on Track!

So you felt generous this year, okay perhaps a bit too generous. Now you're facing a serious amount of debt that has piled up. Here are some sure-fire ways you can get your finances back on track.

You may already be beating yourself up over your crazy year-end spending, and the holiday season isn’t over yet. If so, know that you’re not alone. Many individuals easily rack up debt during the last quarter of the year because, well, everyone’s in the mood to shop and indulge.

A huge downside to getting into the holiday spirit is a pile of debt that may be difficult to recover from if you don’t curb your spending next year. You’re probably wondering how it has come to this, with your holiday bonus gone and your savings dwindling.

Don’t be too hard on yourself, though. You can still get back on track with your finances by following these tips for paying off debt.

Reboot and Refocus

Before everything else, it’s time to take a deep breath. If you find yourself wanting to get your finances back in order, congratulations! That means the rational side of you has taken over. Take stock of why you’re here in the first place, and you’ll find a solid reason to do things right moving forward.

Before everything else, do a reboot. Ask yourself, “How badly do I want to get out of this holiday debt?” If you absolutely want nothing more than to be debt-free next year, use that to refocus your mind. You’ll need it to stay motivated.

Do a Shopping Inventory

The first step toward paying off debt is to survey the damage. One of the hardest things to do in getting your finances back on track is to look back at all the impulsive decisions you made in the last few months — but you have to be brave enough to accept that what’s done is done.

Write down all your holiday expenses and examine where the bulk of your holiday debt lies. Did you spend too much on clothes, shoes, and knickknacks this year? Were there shopping deals you could have easily passed up? It’s time to face those numbers.

Prioritize Payments

Now that you know where the majority of your holiday spending is, you have to prioritize your payments. Make sure to pay off the largest debt or the card with the highest interest first to keep your holiday debt from growing. Not doing so can easily increase the balance due to the unpaid interest.

If you used multiple cards for your purchases, and you’re feeling overwhelmed, consider debt consolidation. Find a balance transfer offer with a low-interest rate. Some banks even offer zero interest for six to 18 months. This is incredibly helpful because it makes the debt more manageable.

Set a Spending Limit

You’ve made prioritizations with your payments. Does that mean you have to be on a spending hiatus until you’ve settled all your debts? You want to be realistic here. You’re human, and you need to spend money to live. The point is to set limits — at least until you get back on track financially.

You can simplify things by dividing your usual expenses into can’t-live-withouts and can-live-withouts. The second category includes items or services that leave some room for adjustment. Put a spending cap on your can-live-withouts for now. It’s much easier to have a fixed amount in mind.

Avoid Major Purchases

This part can be tricky because the term “major purchase” may include medical emergencies, home repairs, or that high-powered laptop you’ve been eyeing ever since its release. You already know that the third example is what you’re supposed to avoid — because you can.

Let’s say your old laptop still does its job, but you could certainly use the upgrade to be more effective at your job. You don’t have to give up the upgrade entirely but instead, put it off for now because it’s not your priority. You need to be strong-willed for this, so you don’t get off track.

Try a No-Spend Challenge

You may have heard of minimalists doing a no-spend challenge and ending up with a lifestyle overhaul. If you’ve been meaning to tweak your spending habits anyway and live a simple, more meaningful existence, this tip is for you. Embark on a no-shopping journey and see how creative and resourceful you can get.

This no-spend challenge is not for the faint of heart, especially if you’re the type of person who loves shopping. You don’t have to quit cold turkey because it can easily backfire. The trick is to slowly wean yourself off the online purchases until you get used to not wanting to spend on anything new for the time being.

Open a Savings Account

If you’ve come this far, give yourself a pat on the back for being a full-fledged adult. Being an adult means facing the music, and you’ve been doing it beautifully so far. What you need is to have some control over your money, so you won’t end up not knowing where it’s going. Open that savings account you’ve been putting off for the longest time.

Set up a direct deposit from your payroll account or main bank card that you use for your bills and purchases. Then, allocate a set amount to be transferred to your savings account every month.

Work Extra Hours

You may still be feeling overwhelmed with that mountain of debt to climb. You may have already curbed your impulse buying and set a budget for groceries. If things are going rather slowly in terms of paying off debt, then it may be wise to work extra hours to speed things up.

Ask your superior if you could work additional hours every week, or maybe take on more projects that pay well to add to your income. Just remember that the money you earn from these hours you put in is meant to help you in becoming debt-free.

Get a Side Hustle

If it’s not an option to work extra hours at your current job, getting a side hustle is a wise option. Do your research and explore the best side-hustle jobs today. Some individuals are even earning more than their current salary doing freelance writing, voice-over work, and online tutoring.

If you’re hesitant about being stuck in front of a computer all day, you can try a food-related venture or possibly renting out that spare room in your apartment. Discover a side hustle that you will enjoy, so it’s easily sustainable. It’s hard to quit when you’re having fun doing it.

Assess Next Year’s Budget

Finally, it’s time to look at the bigger picture. If you could be debt-free in less than a year, it would be a shame to end up in the same situation as you were last year. Learn from experience by creating a plan for your next holiday budget.

If you have bonuses coming up throughout the year, make sure to save a portion for holiday shopping. List down projected expenses like dinner gatherings with friends and your gift list. This way, you won’t be so surprised when you receive your credit card bill at the end of the year.

Wrapping It Up

You know firsthand that debt can easily pile up over the holiday season. However, just because you know there are ways to get back on track next year doesn’t mean you should fall into the same trap every year.

It takes the right mindset and motivation to have better control of your finances, especially during the holidays. To maximize your debt relief strategy, contact our financial specialist today for more information!

Rick Munster

About the Author

Rick’s been with Money Fit by DRS for 18 years and early in his career, he managed two divisions, customer service, and credit counseling, before settling in his current role of managing the organization’s marketing efforts. He is known for being someone who’d give the shirt off of his back for you, and smile while doing it! He takes that positivity and problem solving to consumers when relaying a message of help, hope, and better times ahead. When he isn’t helping consumers regain control of their debt, he loves traveling and seeing new places.