5 Tips For Paying Off Your Christmas Debt

5 Tips - Christmas Debt

5 Tips For Paying Off Your Christmas Debt

For the majority of people, Christmas is considered the most jubilant time of year for both young and old. We all are excited to finalise the year of work or school and spend some quality time with family and friends. They don’t call it the silly season for nothing either. Eating and spending too much is the norm and it’s very easy to lose track of your savings and your waistline! Enjoying a hard-earned break is fundamental for our psychological health, so it’s easy to overindulge in gifts and family holidays during the festive season. But alas, the new year comes around soon enough and we can all start afresh. Time to make some resolutions and plan for the year ahead.


Before we know it, we’re back in the same habits. Work, school, bills, stress. But what if you’re in the situation where you spent far too much during the festive season and now you’re in debt? Well, don’t be startled, it happens to numerous people during this time of year. Thankfully we’ve got some recommendations on how you can effectively clear your Christmas debts in a timely fashion.


Create a list of your debts

The very first step in paying off your Christmas debts is to understand how much you owe. Find a pen and paper and list each of the debts you have, together with the creditor’s, interest rates, next repayment date and repayment amounts. Try to be conservative here and list every debt you have, no matter how big or small. After you’ve determined your repayment amounts, you’ll need to work out a plan on paying off the principal, which leads us to our next tip.


Make Plan

Bear in mind that debts are composed of both interest repayments and principals. Paying the interest only will doing nothing long-term, so once you’ve discovered your repayment amounts, the next step is to create a plan on paying off the principal. It’s always best to concentrate on the highest interest rate debts initially which will save you money in the long run. Interest on loans are a powerful force and can stifle your finances if you don’t take care. You additionally may want to list your income streams too so you can figure out how much will be left over for living expenses. This will assist you in our next tip, creating a budget.



To ensure that you can still enjoy the year ahead, you’ll really want to settle your Christmas debt within the first quarter of the year, so creating a budget and adhering to it is crucial. If you’ve had issues sticking to a budget before, there are lots of great smartphone apps that can help you with managing your budget. Just because you’re on a budget doesn’t suggest you can’t have any fun either. There are an abundance of free and low-cost activities available, you just have to alter your perspective and don’t let your Christmas debt take control of your life.


Save, save, save

While it may sound apparent, the most basic way to pay off debt is to increase your savings and keep away from unnecessary expenses. You might like to stop dining in restaurants once a week which can save you a surprising amount of money. Or you could catch public transport to work to save money on gas. If you feel inclined, chop up your credit cards! Do whatever you have to do to save money – being prudent is fundamental. Get in control of your spendings and save as much as possible; you don’t want your holiday debt hangover to last until next Christmas!


Track your progress

Review your progression every month to see how well your plan is performing. You might want to make some changes if required, and you’ll have a better idea of what changes are practical based upon the previous month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to celebrate your accomplishment. A reward doesn’t need to cost an enormous amount of money, but it will improve your motivation to stick to your plan in times of need. By budgeting and monitoring your development, you’ll have better financial skills and hopefully won’t be stuck in the same position next Christmas!


If you can’t manage your debts, seek advice immediately

If you’ve really tried to at least decrease your debts in a timely fashion and haven’t succeeded, you may be experiencing financial hardship. Instead of waiting and paying a growing amount of interest, it’s better to seek advice from the experts before your situation worsens. There are many options available for those in financial hardship and they vary depending upon your individual circumstances. For a confidential discussion on how to appropriately manage your debts, call Bankruptcy Bunbury on 1300 818 575 or visit http://www.bankruptcy-bunbury.com.au/

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