How to Eliminate Holiday Debt

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The holidays are a wonderful time, full of friends and family, good food and drink, and generosity. When you're caught up in the holiday spirit, it can sometimes be easy to overspend a little — even if you budgeted for the season.

But if you have a little holiday debt, don't stress — you can eliminate it quickly and painlessly with these steps.

1. Make It a Priority

You don't want your holiday debt hanging around, growing larger throughout the year. Instead, make paying it off a priority. With focused effort, you might be surprised at how quickly you can pay off the debt you incurred over the holidays.

Take a realistic view of your debt and consider your situation. Then, make a specific plan: Figure out how much money you will need each month to pay down your debt, and look for ways to free up that cash.

Give paying down your debt top priority over entertainment expenses and other unnecessary spending. With that solid commitment (and hopefully your family on board with the plan), it will be much easier to accomplish your goal. Remember: The sooner you get your holiday debt paid off, the less it will cost you.

2. Transfer Your Credit Card Balances

Many credit card issuers send out special offers during the first of the year for balance transfer cards. With a 0% balance transfer, you can move your holiday debt off your current high-rate credit card to a card that won’t charge you interest. This can help you more easily pay down your debt.

However, it’s important to note that a balance transfer isn’t a permanent solution. It’s not an excuse to continue spending. Instead, it’s a chance for you to get a handle on the situation and plan a way to efficiently discharge your debt. And make sure that your debt pay down plan includes a way to pay off your 0% APR balance before the introductory period comes to an end — otherwise, the new card might charge you even more interest than your original one.

If you can’t get a 0% APR credit card, consider calling your creditor and asking for a lower interest rate. Good customers can often get a rate reduction just for asking.

3. Go on a Spending Diet, and Put the Savings Toward Your Debt

Just as many of us try to lose weight by changing our eating habits at the beginning of the year, the start of a new year is also a great time to go on a spending diet. This is when you reduce your spending so that you only buy what you truly need.

Figure out how much you can cut from your budget — even if you only go on the spending diet until your holiday debt is paid off — and then apply the savings toward your debt. If you have also done a credit card balance transfer, this tactic can help you aggressively eliminate your post-holiday debt.

Your spending diet can also help you prioritize your expenses and figure out if you might be wasting money on things that aren’t important to you. If you don't miss expenses you eliminated during your spending diet, don't add them back to your budget when your diet is over.

4.Start a Side Gig

Starting a side gig has two benefits — it can help you pay down debt faster, and it might be able to help you earn more money after your debt is paid off as well.

You can do something seasonal, like hauling your neighbors’ Christmas trees away; starting an online business; or writing some freelance articles on the side. If you have a hobby you love, like photography or jewelry making, consider trying to make money off it — who knows, someday, it could even become your full-time gig!

5. Clear the Clutter

Like getting a side job, clearing clutter also has multiple benefits. Not only does selling extra stuff help you earn more money that you can put towards your debt, but it also helps you clear out your house to begin the new year without extra stuff around.

Look to sites like eBay, Craigslist, or Amazon Marketplace to sell items online, or if you live in a warm climate, have a winter yard sale. You can even sell your unwanted gift cards — check out sites like Gift Card Granny.

Do you have post-holiday debt? How are you paying it off?