8 Quick Ways to Slash Holiday Debt on a Tight Budget

Photo (cc) by meddygarnet

Were you in the giving spirit this past holiday season? It’s hard not to be, especially when you have the magic plastic at your disposal, available to cover the tab.

But when the holiday cheer is long gone, the credit card bills will still be there lingering over your head and eating away at your wallet.

Your generosity spree was likely for a good cause, but now’s the time to buckle down and lay a hammer to those balances.

Know where you stand

Although you may be tempted to turn a blind eye to those credit card balances out of fear or sheer disappointment in how high they actually are, it’s time to face the music. What’s done is done, and there’s nothing you can do to change the past.

All you can do at this point is be mindful of your spending habits and plan for the future so history doesn’t repeat itself.

Besides, what sense does it make to set a goal if you have no idea of what objective you are trying to accomplish? Take a good look at those balances.

Establish a plan

Now that you have a clear idea of how much debt you racked up over the holiday season, it’s time to come up with a feasible plan to rid yourself of it as quickly as possible. Think of it this way: Temporary pain yields long-term gain.

And no, I’m not talking starvation diets or anything of that magnitude. What I am suggesting is that you make sacrifices so the debt won’t be riding you, and if you made any New Year’s resolutions on money management, now’s the time to move the one on debt management to the top of the priority list.

Execute!

Once a timeline has been set, you must figure out how to come up with the extra funds to make it happen, especially considering that your funds are tight and money isn’t falling out of the sky to help you out.

Of course, the first step is to stop using the magic plastic as soon as possible because there is no way to eliminate holiday debt if you continue to spend.

Now that we have those big three points out of the way, let’s focus on eight more-specific ways to accelerate your holiday debt reduction.

1. Kiss the extras goodbye

I’m sure you’ve heard it time and time again, but one of the most rapid ways to get out of the hole is by making cuts to variable expenses, or completely eliminating non-necessities. Sorry to break it to you, but if you really want to slash your holiday debt quickly, dining out, snack runs, cable, shopping sprees and anything else that isn’t essential must go.

And if you’re thinking that you’re already living with the bare minimum, try tracking every penny you spend for at least a week. You will certainly discover something on the list that can go on the chopping block.

2. Explore promotional interest offers

Do you currently possess a credit card that is still in the introductory interest period? If the balance transfer fee isn’t too high, you may want to consider exercising this option to avoid paying interest each month — the equivalent of flushing money down the toilet.

Also try giving your credit card issuers a ring to see if they’ll cut you some slack on the APR, and emphasize that you are a customer in good standing.

3. Did you get a bonus?

Last year may have been a tough one for you, so it’s only right that you treat yourself with the holiday bonus that came your way at work. Well, not so fast. If you’re really serious about eliminating your holiday debt as quickly as possible, you already know where the entire bonus check should go.

4. Tax refund coming your way?

And the same goes for tax refunds. It’s no fun allocating your overpayment to Uncle Sam toward debt, but making the choice to get rid of the debt as quickly as possible will save you a lot in interest and headaches. Remember that money is already tight, so you definitely don’t want interest growing exponentially while you are struggling to make the minimum payment.

5. Develop supplementary income

Too stubborn to make any cuts, or perhaps there’s not much wiggle room even after you do so? Pick up a side gig or put your creative talents to use to turn a profit. If neither is an option, you can always clean house and sell some of your belongings that are simply sitting around collecting dust.

6. Avoid the dreaded minimum payment

This may require you to step outside of your comfort zone but will be worthwhile in the end. Minimum payments are simply a mechanism employed by creditors to make repayment comfortable for you while they are raking in the cash on the back end. Insomniac interest is a beast, and you definitely don’t want to get caught in that trap.

Let’s say you accumulated $2,000 on a credit card that carries an APR of 16.9 percent and you make only the minimum payment. Assuming you make no additional purchases, it will take you 17 years to pay it off.

7. Put gift cards to good use

Received a gift card that you didn’t want during the holiday season? You can always try selling it to family members or friends at a reduced rate since it won’t do you any good sitting around.

Another option is to sell it online via sites like Plastic Jungle, Gift Card Granny, ABC Gift Cards, Card Pool and Gift Card Rescue to help alleviate some of the debt.

8. Let direct deposit help

As a last resort, you can always redirect a portion of your paycheck to a separate account that you set up just for holiday debt repayment. And remember, something’s better than nothing and a little bit can go a long way.

Do you have any other debt reduction tips for those with limited resources? Let us know in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
9 Items Under $25 That Will Keep Your House Clean
9 Items Under $25 That Will Keep Your House Clean

We’ve rounded up some of the best products for cleaning your bathroom, kitchen and every other room.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

From your closet to the beach, the trash you find may be someone else’s treasure.

11 ‘Disposable’ Items You Should Be Reusing
10 Food Staples That Are Easy and Cheap to Make Yourself
10 Food Staples That Are Easy and Cheap to Make Yourself

Making any of these key foods yourself will improve meals — and your budget.

15 of the Fastest-Growing Jobs Today
15 of the Fastest-Growing Jobs Today

Times are tough, but these career fields are thriving.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

These Major Appliances Got the Worst Reviews in 2020
These Major Appliances Got the Worst Reviews in 2020

Consumer Reports says these home products got the worst ratings from experts.

11 Generic Products You Should Buy at Costco
11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

8 Tips for Retiring Comfortably on Social Security Alone
8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

3 Cable TV Companies Hiking Prices for 2021
3 Cable TV Companies Hiking Prices for 2021

Still married to your cable company? Hold on to your wallet!

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.