How to Pay off Christmas Debt

According to Wales Online, it takes the average Brit four months to pay off Christmas debt. That’s almost half the year paying back what we spent at Christmas.

So how can we make this more manageable?

01. Cut costs where you can

Lots of us rack up credit card debt or store card debt at this time of year because we don’t have enough money in the bank to cover all our Christmas costs. It can be easy for debts to add up without us realising how much we are really spending and then we are left with even more money-stress post-Christmas.

One way to manage those debts is to cut costs elsewhere. January is the time to scrimp and save! Lots of us will be on a health kick, so use that to save money. Fewer takeaways and more at home cooking. Maybe you’re considering dry January – this could be a good way to save money and feel healthier. Think about what of your expenses isn’t necessary. Do you have many subscriptions – Netflix, Amazon Prime, Spotify? These could be cancelled or paused until you feel like you’re in a better place financially.

02. Consider a Debt Consolidation Loan

Cutting back on costs and budgeting isn’t easy and there are other options out there if your debts feel too large to manage alone. If your debt is above £5,000, one option is a debt consolidation loan. They can consolidate debts such as store card debts and credit card debts into one – this means if you have several debts with different creditors, they turn that into one debt instead, meaning one payment per month. This could be a good option if you have a lot of different debts and are feeling overwhelmed. A solution like this will consider how much you can afford to pay back each month.

03. Look into a DMP

Your Christmas debts may be lower than this, according to Wales Online, the average Brit spends £740 more than usual in December. But even this overspending can take months to pay back. A Debt Management Plan (DMP) could be a useful option for someone in this position. You’ll work with an expert financial advisor, who will determine how much you can afford to pay back per month and help you with budgeting. A DMP includes all non-priority debts so for Christmas debts such as credit cards and store cards, this could be a good solution. There are plenty of options out there so our advice is to do your research and find the correct solution for you.

04. Start saving

It might seem too early but if you find yourself overspending every Christmas then maybe it’s time to start saving for next year. Having a small fund, you pay into every month could make Christmas much more manageable, and enjoyable, next time around. This could help you to avoid credit card debt and store card debt during the festive period.