If you’ve overspent this Christmas, don’t panic; with these seven simple steps you can start dealing with your holiday debt and get your finances back on track
1. Complete a post-Christmas audit
Wait until the dust has settled and January is in full swing before sitting down to do a post-Christmas audit. This is the time to really take stock and work out exactly what you spent and why. Go through your bank statement item by item and keep a running tally split by type of expense. At the end of this exercise, you should have a good understanding of where most of your Christmas spending was focused. The more you know, the easier it will be to make changes in the future.
2. Create a new budget
A new year calls for a new budget. If you now have a large credit card bill or a personal loan to factor into your outgoings, as well as higher energy bills, it’s important to include these in your essential monthly spending. Look again at your monthly income, your regular bills, and the minimum monthly payment on your debt. If you have disposable income left over, work out how much of that you can put towards your holiday debt to pay it down faster without making the winter months feel completely miserable.
3. Automate debt payments
Don’t run the risk of missing payments. One of the best things you can do when dealing with holiday debt is to set up automatic payments. These could be taken out on payday or on the date your bills are due, whichever would work best for you. Once these Direct Debits are in place, all you need to do is make sure there’s enough money in the account to cover them. No more last-minute panic or late payment penalties.
4. Seek debt advice
Dealing with holiday debt on your own isn’t always easy. In fact, the sooner you seek independent debt advice, the more time you’ll have to explore your debt management options before you start falling behind. Our friendly team have a wealth of experience helping people recover from overspending. They can guide you through the different debt management solutions available and support you to find the best way forward for you and your circumstances.
5. Try a no spend challenge
While stripping all the luxuries out of your budget isn’t a good way to sustainably manage your spending, it can work for a short time. A no spend challenge can be a great way to make you more conscious about money, forcing you to think each time you reach for your credit card and determine whether you really do need to buy that thing or not. Perhaps you could set a target of going one week without spending or push yourself and aim for 30 days? You might be surprised by how this changes your approach to spending money, even after the challenge is over.
6. Generate extra income
One way to help you pay down your holiday debt and recover from overspending is to earn some extra cash. Depending on your circumstances, this could mean signing up for some extra overtime at work, starting a side hustle, or selling unwanted items. If you do go down the resale route, this is also a great way to clear some of the clutter from your home and make space for your new Christmas goodies.
7 Make a plan for next year
Now that you’ve had to deal with the consequences of holiday debt, you can take steps to make sure it never happens again. Make a plan now to prevent overspending next Christmas. You could start a dedicated savings account and set aside some money every month, start a gift wish list so you can spot bargains as items go on sale throughout the year, or even make the most of the January sales by buying non-perishables like discounted decorations and Christmas crackers to store for next year.
Need a hand dealing with your holiday debt? Our team of experts is here to help. Give us a call on 0161 660 0411 or send a message here
