The holidays are over, the kids back in school, and the New Year mood kicked in. It was a great holiday season, and you wish it had stayed longer. The only regret you have is the dent in your wallet and bank account. No, wait…you even took a loan to enjoy the holiday like everyone else and now you don’t know how to pay it back. Relax, you are not alone, and even better, there is a way out. Join me below as I share ten tips that will help you recover from holiday debt.

1 . Use holiday bonuses and tax returns

Because the holiday bonus is just that, a bonus and not money that you get regularly, you should not divert it to other uses when you have a debt. What you should do with it is to clear part of your debt, and you should clear the most expensive debt first. Likewise, you should use your tax returns to pay your debt instead of purchasing stuff, putting it in a savings account, or investing it.

2 . Cut back on expenses to recover from holiday debt

Write down your expenses so that you know where most of your money goes. Listing the expenses will help you recognize the areas to target. You can save on clothing by not buying any more clothes, and if you must buy, go for decent second-hand, steer clear of designer labels, and buy only at sales. Likewise, you can reduce transportation costs by carpooling or walking to some of the places you need to go to, as this will save gas money. The other area that consumes a lot of your money is food, and you can cut down on this expense in a big way. You can cook and carry lunches to work, stop eating out, start a garden, and use a grocery list to shop and stick by it strictly.

3 .  Use your gift cards

Make use of your gift cards to shop for what you need and use the cash saved to help you recover from holiday debt. You can also sell your gift card on sites like Gift Card Granny and and use the money to help clear your holiday debt.

4 .  Stop credit card usage 

Continued use of your credit card means getting more rooted in the mess you are trying to clear. To avoid this, don’t use your credit cards and use cash instead. You can lock them up or destroy them, but by all means, don’t carry the card around.

Together with not using your credit card, you should call your credit card company and negotiate the interest rate. If you usually clear your bills on time, the company may agree to a lower interest rate, leading to a smaller debt load.

5 .  Analyze your current financial standing 

To get recover from your holiday debt, you must first know its extent. List all your debts, including personal loans, credit cards, as well as car and student loans, if any. List them from the highest to the lowest based on the interest rate. Make a minimum balance payment on each debt, and then focus on paying the debt with the highest interest rate.

6 .  Try returning or selling your gifts 

Of course, you didn’t receive gifts from friends and family so that you could sell them, but you are now immersed in debt, and you should try everything that can help get you out of it. What you do with your gifts is to take advantage of any return policy and get back cash for the return. If the return time has expired, you can try selling the gifts. The proceeds you get from this must go towards reducing your holiday debt. Together with selling gift items, you can also hold a garage sale and sell things lying around that you don’t need anymore.

7 .  Find ways to make extra income

You are immersed in debt, and the interest is piling up each day the debt remains unpaid. To get out of this situation, you could get another source of income. To increase your revenue, you can ask for a pay rise, get another job, make money off your hobby, or work extra hours at your current job.

8 .  Take out loans

It may seem counterproductive to take out a loan as a way to get out of holiday debt, but it works. There are several kinds of loans you can take, as shown below.

        Personal loan – If you have a steady paycheck, you can easily get a cheap personal loan. You can then use the loan to offset the other more expensive loans.

        Home equity loan – If you own a home that’s worth more than the debt you owe on it, you qualify for a home equity loan. You can take out a loan on the home and pay your holiday debt.

        401K loan  – This is a loan you take on your 401k plan; it sometimes requires a penalty and some interest, but it may help you pay the more expensive holiday debt.

        Debt consolidation loan  – Debt consolidation entails putting your debts in a single payment plan. The loan repayment period is extended, and the monthly payments are less and more affordable. This loan                requires discipline on your part to ensure you pay on time to avoid adding on to the already high-interest rates.

9 .  Start saving for the coming holidays now

Saving early for an upcoming expense seems difficult until the time to spend comes and you don’t have any money, forcing you to borrow. What you forget is sacrificing now to pay for a goal in the future is the most practical way to ensure you comfortably afford the item. The money you save in advance for holidays is money that you would have otherwise used on unnecessary expenditures. 

The best way to do this is to open a bank account for the holiday money so that you are not tempted to use it for other things. In addition, opening an account will be a reminder you need to put money in it consistently.

10 .  Pay the maximum you can afford each month

After you have paid your monthly obligations put the remaining money towards the debt. The more you prioritize the holiday debt, the quicker you are going to recover from it. Any extra money that lands in your hands should go to clearing the debt. This could be money from family, savings from negotiating on bills, and money paid by your creditors.

To wrap it up, holiday debt doesn’t have to put a damper on your new year. As we have seen, there are plenty of ways you can pay what you owe. You should cut back on your spending, get a market for your gifts, take a personal loan, get rid of credit cards, start an emergency fund, etc. Combining some or all of the above tactics will help you recover from holiday debt in no time. Don’t wait— start now with the tip most actionable for you and begin the journey to becoming debt-free.