Are you feeling haunted by the Ghost of Holiday Debt? You’re not alone. About 25% of people say it will take them six months or more to pay off all their holiday bills. If you went a little overboard with your holiday spending, don’t worry: there are a few simple tactics you can use to get back on track.
Get a budget
If you’re swimming in an ocean of debt, the absolute first thing you need to do is determine your budget. If you already have one, review your current numbers and see where you need to cut some spending. If you don’t have one, there are lots of budgeting apps out there that can help you get started. Go check them out and see which one best suits your needs.
Sell what you no longer need
Websites like Craigslist and Facebook Marketplace make it easy to quickly sell items for extra cash. Take a look through your house and see what you no longer need or use–as a good rule of thumb, if you haven’t used something in six months or more, you can get rid of it.
Make use of returns
Many retailers will allow you to exchange an item for store credit or even a straight-up refund without a receipt (especially around the holidays). So, before you donate that horrible sweater from Aunt Betty or regift those duplicate toys, see if you can get some cash in exchange. Even if you only get a portion of the value, it’s money you didn’t have before.
Find or negotiate a lower interest rate
Credit card interest rates are notoriously high, and they get higher still once you’ve missed a couple of payments. Sometimes your own credit card company will be willing to negotiate with you for a lower interest rate (after all, they don’t want to lose the business). If not, you can likely find another that offers a sweet balance-transfer deal.
Send small payments throughout each month
If you’re not clear on how interest works, here’s the low-down: it adds up incrementally every single day. Whenever you make a payment, it restarts the cycle again at zero. The longer you go between payments, the more interest you get charged. Therefore, if you can swing it, it makes sense to make several small payments throughout the month to keep interest from ever getting too high.