Having a plan for Christmas debt

11 November 2021

There’s nothing quite like Christmas with all the trimmings – presents for the kids, a big spread of food for the family and maybe some champagne to top it off.

But if you’d like to avoid facing a Christmas debt hangover, there are a few ways you can stop it from sticking around – for too long – after the festive and holiday season.

Front up to your debt

Get a good, clear picture of how much money you owe. It’s tempting to stick your head in the sand but you’ll probably feel more control once you count up your credit card debt, any buy-now-pay-later balances still hanging around and any hire-purchases or other loans you’ve taken out. Write a list and stick it somewhere obvious so getting rid of it remains top of mind.

Snowball it…

If you like the feel of success, try the snowball method to get out of debt. While making the minimum payments required on all your debts, focus on paying off the smaller ones first so that you can claim a win and move to the next. This should keep you motivated.

…or avalanche it

You can save more money by focusing on paying off the highest-interest loans first. Then work your way down until you only have the cheapest – or interest-free – loans left. This means you’re not keeping expensive loans hanging around any longer than you need to.

Put your credit card on ice

While you’re paying down what you owe, consider doing your best level 4 lockdown impression and keep your expenses to the very basics. Some people literally freeze their credit cards in blocks of ice to stop themselves reaching for them when they’re tempted. You don’t have to go that far if it seems like overkill, but it’s still a good idea to cut your spending right back while you devote all your disposable income to paying off what you owe.

Bring in some extra income

If you’re going to struggle to get rid of your debt on your current income, you may need some lateral thinking to bring in some more money. Is there anything that you could sell to raise a bit of cash? Or some odd jobs you could do for friends or neighbours – or even a skill you could turn into a money-earner throughout the rest of the year. Anything you can do to boost the money coming in will help.

Plan for next year

Once you’re out the other side of your Christmas debt mountain, put some strategies in place so that you don’t build up another one next year. That could be developing a budget so that you keep your spending to a level you can cope with without debt, setting expectations for family and friends, or building up a savings account to draw on when the time comes. Even a small amount of money put aside each week through the whole year can add up to a decent amount when the festive season comes around.

Options such as buy-now-pay-later schemes can also be a good way to spread the cost, provided you avoid overspending.

Like to catch up?

We can help you get a financial plan in place so that you hit your goals this year – and in the future. Drop us a line today.


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