The holidays are over, and we’re just getting settled into the new year. Now it’s time to take a look back at your credit card statements and review how much you spent on gifts, travel, and decorations. If you went over your holiday budget and owe some money from all the festivities, you are not alone, and are actually part of the 35% of Americans that took on holiday debt in 2022. Here are three tips to help you with tackling holiday debt.
1. Create a Goal and Break It Down
Don’t get discouraged or feel overwhelmed. The best way to take the debt head on is by creating a goal of how fast you want to pay it off (the faster the better), and then breaking it down by smaller payments each paycheck. For example, if you want to pay off $1,500 in five months, and you get paid bi-monthly, you would have to save about $300 per month, or $150 per paycheck.
2. Cut Back on Expenses that Interfere with Your 2023 Resolutions
Was one of your resolutions in 2023 to shed a couple pounds or use your electronics less? Use that as extra motivation to not dine at restaurants as much, or cancel that streaming subscription. Use the money that you would spend on those items to help pay off your balance faster.
3. Use Some of Your Holiday Money or Tax Refunds
Did you receive any holiday bonuses or money as a gift this year? Put some of that extra money towards your balance. Maybe you’re the type of person to put off your taxes until the deadline. If you are anticipating a refund, file early and use the money to help pay off that balance.