Dealing with Holiday Debt.

• Author: Bartie, Liam

JANUARY 6, 2023 BY LIAM BARTIE

Reading Time: 4 minutes

Money Mentors provides practical tips and free supports for dealing with holiday debt, including credit card balances.

For many people, the most wonderful time of the year also ends up being the most expensive. The joy of the holiday season can quickly become overshadowed by the stress of overspending and the looming prospect of an overwhelming credit card balance.

There is no quick and easy way to deal with holiday debt. However, the first step to recovering from your Christmas spending is to understand there are a number of things you can do to improve your situation. Once you realize there are steps you can take, and people to help guide you, dealing with holiday debt starts to feel much more manageable.

At Money Mentors, we publish numerous success stories of clients who have overcome eye-watering amounts of debt, and come out the other end with financial freedom and an improved relationship with money. These clients often report the same thing: the two most important things you need are a plan and someone to help you execute it. In this article, we will list some steps that might be part of the plan. And if you need help, reach out for a free consultation with one of our credit counsellors.

Step 1: Acknowledge Your Debt

Just like with a scary film, or a nightmare after Christmas if you'll pardon the pun, there can often be a tendency to look away, to avoid checking your balance and coming to terms with the scale of your debt. This is one of the worst things you could do. With high interest rates, credit card debt can quickly grow from a small problem into a much larger one. Get to grips with the situation as quickly as possible by getting all your bills together in one place and writing down each balance and the interest rates associated with them. If you have multiple credit card bills, consider ranking them in terms of balance, from lowest to highest--this will be helpful in a later step.

Step 2: Make a Budget

Once you've got a clear picture of the size of the debt, the next thing to do is draw up a budget. It's essential that you have a good understanding of how much money is coming in and how much is going out. This is a great opportunity to make a meaningful shift in your financial life. Learning how to budget effectively is one of the most important skills you can learn.

To get you started, we wrote this how-to guide on creating a budget and maintaining it, complete with...