If you are feeling buyer’s remorse following the holiday season, you are not alone. Holiday spending increased over 2016 this year, leaving more people with debt. On average, American shoppers racked up over $1000 in debt on holiday shopping according to a MagnifyMoney survey. For many people- it will take months to pay off and come at the additional costs of interest. Here are a few tips to remember for anyone looking to pay off holiday debt.

Beating yourself up won’t pay down your holiday debt.

Although it is human nature to pine over financial mistakes, it is important to avoid beating yourself up. It will further disempower you to take action and for some people may even result in a further downhill slide for their finances. Acknowledge the situation, but then focus on taking action that will move you in the right direction.

Reallocate your funds where you can

The best way to shorten the duration of financial impact from holiday debt is to pay it off faster. Find areas in your monthly spending where you can reduce your expenses and reallocate that spending to paying down your holiday debt. Even if you don’t have a long term spending plan (which I highly recommend you create), take a look at what short adjustments you can make on your spending by focusing in areas that are not fixed expenses. For example, eating out, entertainment or shopping are great places to start.

Find income opportunities

There are two key ways to improve your bottom line… reduce expenses or increase income. If you are already operating lean and don’t have additional room to decrease expenses in order to pay off holiday debt- here are a few ideas for short term revenue.

  • Have a garage sale (offer to take items off your friends’ hands too).
  • Clean out your closet and sell items at local resale stores
  • Offer services related to questions people frequently ask you about
  • Buy at garage sales and resell items online for profit

File for your tax refund early

If you know you are getting a refund, why let the government hold onto it any longer than they already have? Get your filing done as early as possible and use those funds to help pay down your holiday debt. And then take a look to see if it makes sense to adjust your withholding so you keep more of your income now.

Pay down your lowest balance first

Whether paying off debt, building up savings or taking on any other goal, we are more likely to succeed when it is broken down into steps. If you have multiple balances, focus on the one you can pay off the fastest. Once you’ve taken care of one balance, roll that payment amount into the next balance. The payoff will not only be financial, but psychological as well because you will have the satisfaction of success related to your plan.

Make a note in your calendar in October 2018

Remind yourself of the stress you feel about the holiday debt you have today. It will be a great reminder not to repeat the problem in 2018.

Tackling holiday debt is just one piece of the puzzle. Be sure to start planning today so that you have the cash you want to shower your loved ones with gifts. Better yet, consider what kind of experience you can create for them. Toys and objects are often forgotten… but memories and how you made your loved ones feel will always be remembered.

For more information about ways to save money or make more money visit www.sharonlechter.com/gift for a copy of You and Your Money.  It is my gift to you.

To Your Financial Success!

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