Paying Off Your Holiday Debt

The leftovers are dwindling and the vast amount of trees sitting on curbs is making it clear that the holidays have officially come to an end. As the New Year begins, are you expecting an unwelcome credit card statement that will remind you exactly how much you spent on gifts this year? According to a survey by, Americans polled expect to spend an average of $781 on holiday gifts this year. That might be affordable to some, but for most, there isn't a spare pile of cash that large around the house! The good news debt IS avoidable. If you didn't manage to escape it this year, we're here to offer you some helpful tips on how to pay that debt off!

Highest Rates First

The unfortunate thing about credit cards is that, whatever we choose to buy with credit, could end up costing exponentially more than we originally planned. This is, of course, dependent on the interest rate but is still unsettling to consider. When you're paying off your credit cards, pay attention to which credit cards have the highest interest rates. By paying these off first, you minimize your chances of accruing even more debt than you can handle.

Cut Back While You Pay Down

If you blew your holiday budget this past year, it's time to buckle down. Now, we don't mean you can't do anything enjoyable until you're debt is paid, but we do mean you should cut back on non-essentials until you're closer to your goal. Need ideas for cutting back on spending? Well, since leftovers from holiday dinners are distant memories at this point, try your hand at a few new recipes at home instead of going out to eat.

Receive and Return

We've all received that one gift (or a few) that we know came from the heart...but missed the mark! Thank goodness for gift receipts, though. If you've received a gift that you're not going to get much use out of, or if it simply isn't your style, return it to the store for cash or store credit! If you're lucky enough to get cash back for your returned gift, make sure to put that much towards paying your debt down.

Christmas Debt Countdown

Paying off your debts can seem like it will take forever and can be discouraging to some. If you want to be able to pay off your debts and stay on track, keep a running countdown of how much debt you have to pay back and reward yourself after hitting a milestone. For example, if you have $2,000 to pay off from holiday shopping. Allow yourself a small reward (a new item you've been eyeing or a movie you've wanted to see, perhaps) after every $500 you pay down on your debt. By keeping track of your debt this way, you'll be able to see your progress and be less likely to get discouraged.

Now that the hectic holidays have ended, you have time to start thinking ahead to the next holiday season. Try making a list of people that you know you want to shop for and keep an eye out for that perfect gift throughout the year. It's a lot easier on your bank account to pick up the occasional gift once a month than it is to spend nearly $800 all in one month. If you're finished with your holiday shopping won't need to even bother with Black Friday!