Do you know how to ease your way out of debt?

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It’s not easy keeping your spending in check during the holidays, or anytime, so when the credit card bills start piling in come January, it’s enough to raise the panic button and send you flying back to the store for some retail therapy.

If you approach it the right way, though, you can easily manage those bills and keep your stress levels under control.

The stress-free plan for tackling Holiday debt

1. How much do I owe?

Ignoring your bills is the worst thing you can do and it will only add to your debt and weaken your credit rating. So, muster up the courage and call your credit card company so you know exactly how much you owe.

2. Put your credit cards away

Retail therapy might seem like the best option right now to cure those spending blues, but more debt is only going to make things worse. Hide the credit cards and cut out unnecessary spending.

3. Place yourself on a budget

Make a list of unnecessary spending like eating out at restaurants, ordering in take-out food, renting videos, resisting the January sales and your favourite coffee shop, avoiding long journeys and travel expenses, and taking the car through the car wash. It all adds up and there are all kinds of cutbacks you can make like taking your lunch to work instead of eating out. Remember: It’s only temporary and the sooner your credit balance is in the black, the quicker you’ll recover.

4. Calculate your monthly expenses

Sit down with a spreadsheet and enter all your monthly expenses from rent, mortgage, groceries, utility bills, etc., so you know how much you can afford to put toward your credit card bills each month. This will help you to pay off more than the minimum payment and get out of debt faster. It will also help you to determine the length of time it will take you to get out of debt and just exactly how serious your situation is.

4. Transfer your credit card balance

If your holiday spending is spread out over many credit cards, look at transferring your total balance to an interest-free credit card – often offered by credit card companies as an incentive for first-time customers for an introductory period.

5. Return unopened gifts to the store

If you went overboard and treated yourself to a few gifts while you were out shopping for others, or if you picked up a few extras just in case you had surprise guests drop by – return them to the store and get a credit on your credit card.

6. Seek financial help

If you just can’t manage on your own or if you’ve worked out that it’s going to take you more than 12 months to pay off your bills, you should consider consulting a financial expert. Contact your Employee and Family Assistance Program (EFAP) for financial advice. It won’t cost you anything and it will bring about peace of mind.

Holiday debt doesn’t have to be a nightmare. With a little discipline and planning, you can get back on track in no time. If it is a pattern that repeats itself year after year, make a promise to put yourself on a Holiday spending budget next year and save yourself the stress. It’s all worth it in the end.

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