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Have you overindulged over the holiday period? It’s hard to start the year when you have post-holiday debt to deal with.

It’s time to get back into your normal spending routine after spending more on events and parties during the holidays. Take control of your finances now before it snowballs into a debt crisis all year long.

Here are some ways to help you pay down your holiday debt.

Budget

“Create a budget and stick to it” — is one of the fundamental steps that should be taken when cleaning up your finances.

Figure out how much is coming in (income), going out (spending), and surplus each month to put towards paying off your debts.

Write everything out and make a list of all of your payments and bills — from rent to loan. Segregate your fixed expenses (rent or insurance) from your variable expenses (utilities or entertainment). Obviously, there’s room to cut costs from your variable expenses.

To make budgeting easier and accessible, try one of the many budgeting apps available like Goodbudget or Wally.

Change your habits

Now, it’s time to put that budget into action. Making favourable changes in your money habits is the cure to your holiday debt hangover.

You can still enjoy your regular perks like coffee or dinner with friends, but it’s better to try and change some of your habits. Instead of going out for dinner 2x a week, set aside the money you would’ve spent on the second night to pay off your debt.

Some changes to your habits can build up into a large amount of savings.

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Debt consolidation

When it comes to paying off your debt, especially multiple debts, you have the option to consolidate them all into one loan.

With debt consolidation loan, you only have one loan to worry about. This can speed up paying off the principal, which makes dealing with the balance faster.

Debt consolidation can improve your credit score and there’s a tax break too.

Automate your debt payoff

When you already know the amount you need to pay each month for your goal, you can set up automatic payments with your bank to transfer money whenever you get paid. It’s best to transfer these funds immediately so you won’t get tempted to spend it.

Furthermore, you won’t have to worry about missing payments, which can hurt your credit score. You can also let the automatically reduced balance motivate you to keep saving.

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