Photo by Karolina Grabowska

Paying your Holidays Past Debts is part of designing a healthy holiday budget for next year.

The debts of holidays past are a stirring thought that can keep you up all night. As the holiday season rapidly ends, it can feel overwhelming to pay last year’s bills still.

You are not alone if you racked up holidays past debts last year. A 2021 survey on holiday shopping found that more than half of respondents felt they spend too much during the holidays.

If you have got lingering debts from the last holiday season, there are ways you can take to settle them and even set a better budget for the next gift-giving season. Avoid nagging debt specters this time next year by following these four steps. 

Four Steps to Pay Off Previous Year’s Holiday Debt

As you look forward to next year’s holiday season, you may feel defeated if you continue to go about last year’s holiday purchases. But there are practical and straightforward debt repayment ways that can help you pay your accounts in total, perhaps sooner than expected. These include:

1. The debt snowball method. When using this seasonally appropriate method, you initially pay off the slightest credit card balance while making minimum payments on your other bills. Then as you gain repayment momentum, put more money toward the next most considerable debt until your total debt is paid off. Paying off small balances first can help you stay motivated to tackle more significant proportions.

2. The debt avalanche method. Alternatively, you can put the most effort into paying off the credit card with the highest interest rate first. Then work your way down through accounts that gradually lower rates until you pay off all balances. This could save you the most in interest charges.

3. Balance transfer card. Balance transfer cards to pay off holiday debt may offer an introductory offer of a 0% annual percentage rate (APR). This can give you ample time to repay your debt without acquiring more interest.

4. Debt consolidation loan: You can take a loan at a lower interest rate to pay off high-interest credit cards. Though you ultimately owe the same principle, you can save notably with a lower interest rate while you pay off your debt. Further, you can check online the Law Offices of Ronald E. Stadtmueller, an honest debt relief in San Diego. Our goal is to help you achieve freedom from debt and make a fresh start. Let us evaluate your current financial situation and discuss the options available so you can regain control today. Trust us, for we draw on over 30 years of experience guiding clients in California and allow our attorney to help you regain a firm financial footing. Relatively, you should not have to endure creditors’ aggressive collection tactics. We can end the harassing phone calls and annoying letters meant to pressure you, and creditors must immediately stop collection efforts, including those distressing letters and phone calls. As your attorney, we will take charge of your creditors and give you back your peace of mind.

Even if you cannot completely wipe out last year’s debt before the upcoming holidays, consider starting now. Doing so can help with this year’s shopping budget. That is because you will pin down some regular debt payments and shape your expendable income.

5 Ways to Stick to This Year’s Holiday Budget

Once you address your debt, setting up a budget for the upcoming holidays is crucial to avoid acquiring too much debt again. There are many ways to set up a holiday budget, including:

1. Shop with cash. Some people feel the easiest way to avoid overspending is to take a set amount of cash shopping and only spend what they have. Come up with your gift-giving list, set a budget for each, and stick to those amounts.

2. Automate your savings. You can set up second savings or checking account and automatically have a percentage of your paycheck deposited—out of sight, out of mind—for gifts.

3. Swap your holiday savings with another budget item for a couple of months. If you have a non-essential category in your budget, consider temporarily re-labeling it as holiday shopping. 

4. Buy one gift at a time. Instead of going all-in-one on the weekend and overspending, begin several weeks before the holiday season to buy gifts one at a time that stays within your weekly budget.

5. Suggest a no-buy holiday with your family. One of the easiest ways to slash your holiday budget is not to spend at all. No-buy holidays are becoming more popular, with family members giving favors, passing on well-loved hand-me-downs, picking up finds from local Buy Nothing groups, and making gifts instead of spending on shopping.

Sticking to your budget and easing holiday financial stress is the best gift you can give to yourself this holiday season.

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