13 Ways To Crush Your Holiday Debt Faster

Sail through post-holiday stress by mastering these 13 rapid debt-payoff tactics.

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Updated June 6, 2024
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The holiday season often brings joy, laughter, and an abundance of festivities. However, for many, it also leaves a lingering aftermath in the form of holiday debt.

If you find yourself facing the daunting task of paying down post-holiday expenses, fear not. We compiled actionable tips to help you swiftly tackle and eliminate that holiday debt. 

From smart money moves to practical lifestyle changes, each is designed to provide you with a roadmap to financial recovery.

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Use a balance transfer credit card

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Consolidating your holiday debt onto a balance transfer credit card with a 0% APR for an introductory period can help you save money on interest and pay off the principal faster. 

Be mindful of transfer fees and ensure you have a clear plan to pay off the transferred balance within the introductory period.

Start a side hustle for extra cash

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Starting a side hustle is a great way to pay off your holiday debt. Whether it's freelancing, consulting, or offering a skill or service you excel in, a side hustle can provide an additional stream of income.

Channel the earnings from your side hustle exclusively toward debt repayment to accelerate your progress. Use this opportunity to generate extra cash and explore your passions and skills that may have income-generating potential.

Prioritize debt reduction by interest rate

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Not all debts are created equal, especially when it comes to interest rates. Prioritize your debt reduction efforts by focusing on the debts with the highest interest rates first. 

By paying off high-interest debts more aggressively, you save money in the long run and accelerate your overall debt payoff.

Create a list of your debts, organize them by interest rates, and allocate extra funds toward the debts with the highest rates.

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Pay more than the minimum payment

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While making the minimum payment on your debts keeps you in good standing, it does little to expedite your debt payoff. Commit to paying more than the minimum on each debt, especially on those with higher interest rates.

Even a modest increase in your monthly payment can have a significant impact over time, reducing the total interest paid and shortening the repayment period.

Cut back on non-essential expenses

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Identify non-essential expenses in your budget and cut back on them to free up more funds for debt repayment. This could include dining out less frequently, postponing discretionary purchases, or reassessing subscription services.

Temporary sacrifices in non-essential areas can lead to substantial savings, providing you with the financial resources to pay down your holiday debt faster.

Negotiate lower interest rates

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Take the initiative to negotiate lower interest rates with your creditors. A simple phone call expressing your commitment to debt repayment may lead to reduced interest rates, especially if you have a good payment history.

Lower interest rates mean more of your payments go toward the principal balance, accelerating your journey to debt freedom. Be persistent and explore this option with each of your creditors to maximize potential savings.

Use windfalls and unexpected income

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Put unexpected windfalls or income to good use by directing them toward your holiday debt. Consider allocating these unexpected funds toward debt repayment, whether it's a tax refund, a work bonus, or a financial gift.

Using windfalls to make lump-sum payments can significantly reduce your overall debt burden and fast-track your progress. 

While it may be tempting to indulge in treats with unexpected income, prioritize your financial well-being by chipping away at your holiday debt instead.

Consolidate high-interest debts

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Explore debt consolidation options to simplify your repayment strategy and reduce interest rates. Consolidating high-interest debts, such as credit card balances, into a single loan with a lower interest rate can streamline your payments and save you money.

Research different consolidation options, including personal loans or debt consolidation programs, and choose the option that best fits your financial situation and goals.

Sell unused or unnecessary items

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Generate additional funds for debt repayment by decluttering your living space and selling unused or unnecessary items. From clothing and electronics to furniture and collectibles, there's likely value in items you no longer need.

Utilize online marketplaces, garage sales, or consignment shops to turn clutter into cash. The proceeds can be directed toward paying down your holiday debt, providing immediate relief and tangible progress.

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Temporarily pause contributions to retirement accounts

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Consider temporarily pausing contributions to retirement accounts to redirect more funds toward your holiday debt. 

While contributing to retirement accounts is essential for long-term financial health, a temporary pause can provide a short-term boost to your debt repayment efforts.

Consult with a financial advisor to assess the impact on your overall financial plan and ensure a balanced approach between debt reduction and long-term savings.

Seek professional financial advice

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If your holiday debt feels overwhelming, seek professional financial advice. Certified financial planners or credit counselors can assess your unique financial situation and provide personalized strategies for effective debt management.

Professional advice offers clarity on your financial landscape and equips you with the tools to make informed decisions on your journey to debt-free living.

Explore debt settlement options... carefully

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Debt settlement involves negotiating with creditors to settle your debts for less than the total amount owed. While this can result in a significant debt reduction, it has potential drawbacks, including negative impacts on your credit score and tax implications.

Explore debt settlement options cautiously, considering the associated risks and seeking legal or financial advice before proceeding. This strategy is best suited for individuals facing extreme financial hardship and should be carefully considered.

Establish an emergency fund

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Building an emergency fund is crucial, even as you focus on paying down holiday debt. An emergency fund acts as a financial safety net, providing funds for unexpected expenses and preventing reliance on credit cards in times of crisis.

Allocate a portion of your budget to gradually build an emergency fund. Having this reserve can help prevent the accumulation of new debt during unforeseen circumstances and enhance your overall financial stability. 

Consider keeping your emergency funds in a high-yield savings account to build up your savings faster.

Bottom line

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As you navigate the path to paying down your holiday debt, remember that each step helps you get out of debt and build wealth for the future.

Consider which tips align best with your situation, implement them with determination, and watch your holiday debt diminish. 

What steps will you take today to pave the way for a debt-free tomorrow?

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Author Details

Adam Palasciano

Adam Palasciano is a personal finance-obsessed and money-savvy individual who loves to hash out content on all things saving money. He specializes in writing millennial-friendly personal finance content, covering topics ranging from trending financial news, debt, credit cards, cryptocurrency, and more.