Landed on holiday duty? Your 5-point payment plan

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Don’t let your vacation debt drag on. Here’s how to get rid of it.

  • It is customary to end the festive season with debts.
  • The right strategy to get rid of this debt may include redesigning your budget or getting a part-time job.

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Many people vow not to overdo it on the holidays only to end up in debt by the end of the season. If this happened to you this year, don’t berate yourself.

First, you are undoubtedly in good company. But also this year sales have been harder to achieve due to supply chain issues and inflation, so it may have been more difficult for you to stick to your budget.

If you are starting 2022 with a bunch of holiday debt, you need to get rid of them as quickly as possible. The longer you carry this debt, the more interest you will receive and the more it can damage your credit rating. Here are five steps to get rid of your holiday debt quickly and effectively.

1. Take a look at the big picture

Knowing how much debt you have accumulated is your first step towards paying it off. Take a look at your various credit cards and see what your balance entails. Knowing this amount will help you deal with debt more effectively.

2. See if there is a more affordable payment method

If you’ve written off your holiday expenses on various credit cards, you may now be seeing quite high interest rates on your debt. In this case, lowering interest rates will make it easier to pay off the debt and make it more affordable.

One option to look out for in this regard is balance transfer, where you move different balances to one card with a lower interest rate (or, ideally, with an initial rate of 0%). Another option is to take a personal loan, use it to pay off the debt, and then pay off that loan at a lower interest rate.

3. Change your budget.

You may need to cut some expenses in the near future to free up cash to pay off debt. Take a look at your budget and see which expense categories are considered immaterial. Then, consider cutting your spending in these areas until you get a good dent in your debt.

4. Get the side fuss

There may not be many costs in your budget that need to be cut. Or, you might not want to give up streaming services, morning coffee, and weekly takeaway dinner. If so, then getting the side hustle and bustle can make it much easier to pay off your vacation debt quickly. Since this income will not be directed to other accounts, you can use it to fund your balance.

5. Get cash for holiday gifts you received but don’t want.

A custom made sweater with your name made by your aunt is a holiday gift you’re probably stuck with. But if you receive gifts that you don’t need or need, selling them for cash can give you a decent amount of money to pay off your debt.

If you have gift cards in stores you don’t visit often, there are sites like that allow you to redeem them for cash. Alternatively, you can sell electronics, clothing, and other merchandise online through your local social media page. Or have an old-fashioned yard sale.

Kicking off a new year with holiday debt may not be the best option. But if you find yourself in such a situation, do not despair. If you are committed to paying off your debt, you may be surprised at how quickly you can pay it off. And once you’ve done that, you can start procrastinating for next year’s holidays to avoid repetition.

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