Three Ways to Deal With a Christmas Debt Hangover

If you’re reading this blog though, chances are, you probably had a nagging feeling that perhaps Christmas was costing a bit much this year. If this sounds like you, the good news is that you’re certainly not alone.

Borrowing over the festivities can lead to what is known as a ‘Christmas debt hangover’. That feeling, when 2020 starts, that you’re still dealing with the repercussions of an expensive December. Fortunately, we’re here to help – and make sure that hangover doesn’t turn into a long-term migraine.

1. Assess the impact of your Christmas debt

First, it’s important not to panic. You can use a budgeting tool to determine what your monthly income is as well as your outgoings. Perhaps your Christmas debts aren’t as big as you thought they were and – hopefully with a few cutbacks – you can still make ends meet.

If it looks like the festive season has taken a toll on your income, then it’s time to do something about it.

2. Which debts do you need to tackle now?

Next, you should determine which debts are a priority. These are expenses where the repercussions of not paying would be severe. For example, not paying your bills could result in legal action. Although we would never suggest not paying your debts, identifying which are non-priority gives you time to find a solution. Regardless, knowing your financial state and identifying opportunities for improvement is never time wasted.

3. Consider getting help

If – after prioritising and identifying solutions – your financial situation still looks bleak, then it’s time to consider getting help. Although many people choose to ignore their debt problems, the longer you leave this problem, the worse it usually gets.

Fortunately, there are a variety of solutions to resolving Christmas debt. For larger amounts, an IVA could give you some much-needed breathing room and help write off debt. Alternatively, a DMP (or Debt Management Plan) could help bring your non-priority expenses under control.