5 Tips For Paying Off Your Christmas Debt

//5 Tips For Paying Off Your Christmas Debt

For the majority of people, Christmas is considered the most splendid time of year for both young and old. We all are thrilled to wrap up the year of work or school and enjoy some quality time with family and friends. They don’t refer to it as the silly season for nothing either. Eating and spending too much is the norm and it’s rather easy to lose track of your savings and your waistline! Enjoying a hard-earned break is important for our psychological health, so it’s easy to overindulge in presents and vacations during the festive season. But alas, the new year arrives soon enough and we can all start a fresh slate. Time to make some resolutions and plan out the year ahead.


Before we know it, we’re back in the same routine. Work, school, bills, stress. But what if you’re in the scenario where you spent far too much in the course of the festive season and now you’re in debt? Well, don’t be spooked, it happens to plenty of people during this time of year. Luckily we’ve got some tips on how you can successfully repay your Christmas debts in a timely fashion.


Create a list of your debts


The first step in paying off your Christmas debts is to discover how much you owe. Get hold of a pen and paper and list all of the debts you have, alongside 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 have to work out a plan on paying off the principal, which brings us to our next recommendation.


Make Plan


Remember that debts includes both interest repayments and principals. Paying the interest only will doing nothing long-term, so when you’ve determined your repayment amounts, the next step is to devise a plan on paying off the principal. It’s normally best to concentrate on the highest interest rate debts to start with which will save you money over time. Interest on loans are a formidable force and can debilitate your finances if you don’t take care. You likewise may want to list your income streams simultaneously 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 make sure that you can still enjoy the year in advance, you’ll want to settle your Christmas debt within the first quarter of the year, so developing a budget and following it is critical. If you’ve had trouble adhering to a budget in the past, there are a lot of great smartphone apps that can help you with maintaining your budget. Just because you’re on a budget doesn’t suggest you can’t have any fun either. There are lots of free and affordable activities available, you just need to change your perspective and don’t let your Christmas debt take control of your life.


Save, save, save


Even though it may sound obvious, the quickest way to pay off debt is to grow your savings and avoid unnecessary expenses. You might like to stop eating out once a week which can save you a surprising amount of money. Or you can catch public transport to work to save money on gas. If you feel inclined, chop up your credit cards! Do whatever you need to do to save money – being prudent is vital. Get in control of your expenditures and save as much as possible; you don’t want your holiday debt hangover to last until the following Christmas!


Monitor your progress


Evaluate your progression each month to discover 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 realistic based upon the past month’s efforts. If you’re being super disciplined and have over-performed, then reward yourself to commemorate your accomplishment. A reward doesn’t have to cost an exorbitant amount of money, but it will improve your motivation to stick to your plan in times of need. By budgeting and monitoring your progress, 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 honestly tried to at least decrease your debts in a timely fashion and haven’t been successful, you may be experiencing financial hardship. Instead of waiting and paying more and more interest, it’s better to seek advice from the experts before your situation gets worse. There are many options available for those in financial hardship and they vary depending on your individual circumstances. For a confidential discussion on how to appropriately manage your debts, call Bankruptcy Advice Perth on 1300 879 867 or visit www.bankruptcy-advice.com.au/perth


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