Tackle Holiday Debt with 3 steps

Amanda H. Christensen, AFC, Utah Money Moms Editor

​Hey there and welcome to 2022! Today I thought I’d share some key strategies to tackle holiday debt. I recently saw a statistic that reported 48% of Americans planned to spend more money during the 2021 holiday season to make up for the festivities they were not able to participate in during 2020. If this applies to you, the sooner you create a plan to tackle your holiday spending the better! Here are the three steps you’ll need:

1. Review the damage. Carve out some time to sit down and gather all the data about how much holiday debt you’ve accrued. Bring ice cream if it helps. What is the total payment due each month on all of these debts combined?
2. Rework monthly bills. Now that you know the total payment due, you’ll have to find that amount in your monthly discretionary spending. Bonus – you’ll pay off debts even faster if you pay extra toward your payments each month. So, as you review your monthly bills, search for subscriptions you could temporarily suspend, expenses you could eliminate, or daily spending habits you could curb temporarily to prioritize knocking out what you owe.
3. Set up Automatic Payments. Once you know the extra amount you can afford to pay towards your holiday debt, set up automatic payments or schedule payments to each of your creditors right away. This step is critical for success especially if you used the ‘buy-now-pay-later’ option to cover holiday spending. If you miss even one payment, you’ll be hit with fees and interest.

Bonus Step 4: Serious about tackling debt this year? Visit www.powerpay.org to create a free debt elimination plan with a month-by-month calendar. This free tool shows you what to pay to which creditor to speed up your debt repayment timeline and save you (a lot of) money in interest!