5 easy ways to get out of holiday debt (2024)

The holidays can be an expensive time. There are obvious expenses that come with the season, like travel and buying gifts. There are other costs that you may not account for, too, like tips for your doorman or your child's daycare provider, buying food for a big holiday meal or going out to celebrate with friends. These smaller costs can add up, and it's common to accrue a little bit more holidaydebt than intended.

Luckily, there are several ways to get out of holiday debt if you overextended yourself. Here are a few of the options you have.

Explore your debt relief options today to get out of debt as quickly as possible.

5 easy ways to get out of holiday debt

You have options for getting yourself out of debt and getting back on the right path financially, including:

Use a debt relief program

There are programs specifically designed to help people facing insurmountable debt. Some common debt relief programs include:

• Debt management program:A debt management program will help you pay off your debts by negotiating lower interest rates and combining your debts into one payment. These programs are generally offered by credit counseling agencies.
• Debt settlement program:If you are struggling with holiday debt, this option helps you negotiate the total amount of debt you have to pay. These programs can negatively impact your credit score, though, so you may want to consider other options first.

Find the debt relief program that fits your situation today.

Use a debt consolidation loan

Adebt consolidation loanallows you to roll all of your debts into one loan and pay them off. This option can be useful if you have debt from multiple sources. And, depending on the rate you're offered, you may also be able to lower your interest rate compared to the rates on your original debts.

This choice is usually best for someone with a high credit score, as you'll have to qualify for a debt consolidation loan or a private loan. If you own a house, you could also consider using a home equity loan for this purpose.

Adjust your spending

If you spent too much money over the holidays, the best way to pay it off could be to streamline your spending now. If you can cut $100 per month from your spending, you can put that money toward paying off your debt to pay it off faster. The spending cuts could be as simple as making coffee at home rather than buying it in a coffee shop — or they could be bigger, like selling your car and relying on public transportation.

Focus on high-interest debt first

If you have debts from multiple sources, you can focus on paying off the debts with the highest interest rates first. Not only does this reduce the total amount of interest you accrue, but it also helps you get out of debt faster.

A higher interest rate means more money gets added to what you owe each month, meaning it will take longer for the loan to be paid off.Credit card debts often have high interest rates, so look to those first and prioritize the one with the highest rate.

Earn extra income

In addition to spending less, you can also earn extra cash to help pay off your debt. This can be something as simple as doing paid surveys— or it can be more involved, like renting out a spare room in your home. You can even sell off some of your old clothes and jewelry to make some money and pay off your debts.

Take out a 401(k) loan

Depending on the rules of your plan, you may be able to borrow up to $50,000 from your 401(k)if you have been contributing to one through your job. You will have to pay this loan back with interest, but it may be at a lower interest rate than your existing debt. Saving for retirement is important, though, so make sure to consider the ramifications of this option before moving forward.

The bottom line

If you are in debt after the holidays, there are moves you can make to get back on the right financial footing. Whether you use a debt relief program or just adjust your spending habits, you should make sure to act quickly so you don't end up with even more debt due to interest charges.