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How to Bounce Back From the Holiday Debt Hangover

Tonya Rapley

The holidays have come and gone but many of us were left with more than gifts. Holiday debt, or what I affectionately refer to as the "holiday hangover" often accompanies the wrapping paper, eggnog and holiday cheer.

If you went a little spending crazy this year, and years before, you are not alone. Consumers are more likely to spend money they don't have during the holiday season under the contagious spirit of giving. The National Retail Federation reports the average consumer spent $703 on Christmas in 2013, and it is estimated that 37% of consumers use credit cards to purchase their holiday gifts.

If you find yourself suffering from a post-holiday financial slump, here are a few things you can do to overcome your holiday spending hangover.

1. Make an Accurate Assessment of the Damage

If you charged all of your holiday purchases to one card this will be easy for you. But if you decided to spread the love around on different cards, create a spreadsheet with the balances of each card. Be honest during this process. If you withdrew money from your savings account, calculate how much you withdrew for the sake of covering holiday gifts.

2. Create & Commit to a Repayment Plan

After you have an accurate understanding of your debts, determine how much money you can allocate from your budget to pay the balances off. If you have balances on several cards, determine which card has the highest interest rate and pay that balance down the fastest. This calculator can help you figure out how long it will take to pay off your credit card debt. Carrying a high balance on your credit cards can hurt your credit, so checking your credit scores, which you can do for free on Credit.com, can give you an idea of where you stand. If it's possible, aim to pay off credit card balances in 90 days or less.

If you borrowed money from your savings account or any other accounts, the same concept applies, create a repayment plan and pay yourself back.

3. Start Saving for Next Christmas

Christmas is the same time every year, yet somehow we manage to wait until the last minute to make purchases, often without a budget. Consider joining a savings club or opening a savings account that you can't touch. By putting away $50 each month you will have $550 to spend by the time Christmas rolls around. Also consider picking up gifts throughout the year, which will definitely be easier on your wallet come December.

Remember to be kind to yourself during this process. Beating yourself up is no way to start the year. Create a plan, commit, and start checking off your 2015 financial goals.

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