Post Holiday Debt Reduction Strategies

The holiday season has been over for about a week now. The presents have been exchanged and opened, the tidings and well wishing has come and gone. All that is left now is the memories, and the snow that continues to fall. Oh, and that pesky business of actually paying for all the stuff that was bought over the holiday season.

It has been noted that some consumers will pay off their holiday debt until March. While that is an excessive case, it is no doubt that the majority of Americans will run up some sort of debt in order to satisfy the kids or the wife when it comes to buying that perfect gift. While there is nothing wrong with spending some money for those you care about, there should be some sort of strategy for paying off those bills.

The best strategy to have is to have a budget set up before there is even a trip to the mall. By knowing how much you want to spend on your gifts, there is a restraint to how much you spend. While it is OK to go above your budget a bit, there should be a cap on spending at about 110 percent of your Christmas budget. For example, if you plan to spend 100 dollars on gifts, there should be no more than 110 dollars spent on gifts.

This will give leeway as you shop in case there is a gift that might be slightly more expensive than you planned, but will allow you to still purchase that great gift. Having a budget will also ensure that you look through fliers and clip those coupons to help you save money before you shop.

Having a budget might seem like something that won’t help until next year, but knowing what you spend beforehand will help you plan ahead to how you are going to pay the debt off. For example, if you know you are spending 100 dollars and putting it all on a credit card, you can budget 50 dollars a month in January and February to pay off that debt without it being a major hassle.

What if there was no budget, and spending got out of hand in the heat of the moment? A good strategy might be to transfer the balance to a lower interest credit card. Assuming there are no transfer fees, it would be wise to transfer a balance from a 18.9 percent APR card to a card with a 9.8 percent APR. 

Another good strategy is to pay off the balance as fast as you can. Like any other debt, take another job, get more hours at work, or collect change out of the couch cushions. Whatever you do, make sure that this debt doesn’t linger, or else you might still be paying off the Christmas debt into the next holiday season. The interest paid on lingering debt is not worth it.

The holiday season is a great time to enjoy with your family and friends. However, make sure that you have a plan to pay for the gifts and other debts that are incurred during the season. Have a budget for the season, have a budget to pay off that debt and make sure it is a top priority so that the holidays can become nothing more than a happy memory by the end of January.