How to beat the Xmas debt

Last updated: 28 January 2016

It sometimes seems that the festive season is tailor-made to get us overextending ourselves and setting us up to start the New Year on the back foot.

Whilst you can’t undo what has happened, you can take steps to get back on top of things.


Survey the situation

We all know that the festive season is full of out of the ordinary expenses but take some time to look through your statements and identify where the money went.

Of course a fair amount of it might have been on gifts but were there other expenses such as extra nights out, travel to see the relos, the extra groceries bills for all that festive food!

In any case, take time to understand what your regular expenses were and what the extra Xmas debt is that you need to tackle.



To get back on an even keel you may need to come up with a specific budget for the next few months. Remember an emergency budget doesn’t have to be forever so you might be able to take on some short-term pain to make things better in the long run.

Start with the non-essentials. Are there any things you regularly spend money on that you could go without for a while? It might be as little as forgoing that extra coffee to avoiding eating out or drinking for a bit.

Then look at your recurring costs. Could you save money on your fixed costs such as television subscriptions or even your utility bills? It is always worth asking your provider if you are on the best package or deal for your situation but remember to fully check the terms and conditions before making any decisions!

Ultimately, the aim is to reduce your expenditure enough whilst covering everything you need to and then using the extra to pay down that debt as soon as possible.


Tackle the highest interest first

When it comes to actually tackling the debt, make sure you focus your efforts where you are incurring the most debt or interest.

Be sure to do your best to avoid going into default on anything as defaults can remain on your credit file for up to 5 years and impact your ability to access credit in the future.

As part of your plan it can be worth considering or even a personal loan if you have a number of higher interest debts. Again, read all of the product information before committing to anything and be careful not to actually increase the amount you owe.


Set goals and go for it

Make your plan and stick to it. You should have a rough idea of when you should be able to clear the debt even if it will take a while, slow and steady can win the race.

Of course, if you want to speed up your progress, you can always look for ways to earn extra cash. For example, you could:

  • Go through those presents or the closet and see if you can sell anything
  • Look for some extra work
  • Join the sharing economy by renting out something you own


Reward yourself

Finally, why not aim to do a little more than just repay your debt? Save just a little bit extra and then use it to reward yourself for all your hard work. After all, you will have earnt it!