Human nature dictates that when we have the option, we tend to procrastinate. When it comes to paying off holiday bills, the longer you wait, the greater the challenge-so time is of the essence. It’s all about control and you seize control by proactively taking on your debt, rather than waiting for the bills to arrive.
“Waiting until January to start paying holiday bills won’t erase that debt any faster. Whether you like it or not, those bills are coming. Create a plan that will spring into place immediately following the holiday season; you’ll be more effective right out of the gates. If you’ve overspent, you still have time to correct the damage if you can pay the debts before the interest starts to accrue,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
Assess the damage
Hopefully you had a budget to guide your holiday spending and you can simply reconcile that with your outstanding debts. However, if you exceeded your budget or were freestylin’ this holiday season, you’ve got to determine what and where you owe so that you can accurately determine the best plan of action. Don’t wait until bills are in the mailbox to find out what you owe.
“Chances are you already have a good idea of what you spent. Start by gathering receipts or checking online balances of your cards, so that you have an accurate picture of how much you really owe,” says Schwartz.
Detail how much you owe and to whom. Note when payments are due and interest rates for differing cards.
Decide on your options
Have you spent far beyond your means? Have you grown your debt over the holiday season? This will dictate how aggressively to attack these debts.
As a rule, the quicker you pay down debt, the better. Simply, the longer the debts sit the more money they will ultimately cost you. If you have a smaller amount to pay off, you may be able to find some extra cash flow by retooling your budget.
If you are dealing with more debt, you may want to consider doing a balance transfer to the lowest interest card that you have. If the debt is really substantial and has been added to existing debt, you may want to consider a consolidation loan as part of your longer term financial plan.
Detox your debt
It’s common for people in January to cut out a lot of the excess indulgences that they enjoyed (perhaps a little too much) over the holiday season, like rich foods, sugary treats and alcohol, just to get their health and fitness back on track. Apply the same thinking for January to getting your finances fit as well.
That means it’s time to trim spending down to the bare bones so that you can free up extra cash to pay for your financial indulgences from the holiday season.
Get ready for next year
With the memory of this year’s holiday spending hangover still fresh, make plans to avoid it next holiday season. Starting this month put a small amount aside every month to pay for your holidays spending in cash.
Has holiday spending got you in debt hot water? Don’t wait until the bills arrive to develop your debt payment plan. We can help you strategize as to how most effectively you can reduce your debts. Call one of our trained credit counsellors at or get started with our online debt analysis.