How to Rid Yourself Of Your Christmas Debt Before February 1st

Every year is the same. You try to plan for Christmas: Make a budget, by things on sale, be realistic. But it never works out. You start every New Year in the hole. It happens to the best of us – even myself! What matters is that you dig yourself out and fast! Here, I’m going to share with you some of the ways that I pull myself out of Christmas debt (and all other kinds of debt that a shopaholic such as myself gets into…).

1. Figure out EXACTLY how much you went over budget.
What was your budget? – or, let me rephrase that, what should have been your budget? Figure this out first. Then, go through all your receipts from November and December and your bank statements and make sure to include things like that latte you absolutely needed during that crazy boxing day sale, or that sub sandwich you were starving for while shopping for grandma and grandpa’s gifts or that Christmas mani that you couldn’t go without because, what is Christmas without festive nails? All of the above are reasons why you now find yourself in debt. Be prepared because this number is ALWAYS bigger than you expected. Trust me, I’m an expert on overspending.

2. Figure out EXACTLY how much money you will have left over by January 31st after paying your bills.
Anticipate your next pay cheques: How many pay days will you have before the month is up and approximately how much money do you expect to receive on these pay cheques. Be accurate – do not overestimate as this will only hurt you more when you find yourself still in debt and depressed on February 1st. Then, add up ALL your bills. That means food, hydro, rent, heat, water, cable, cell phone, internet, gas and transportation, web subscriptions or memberships, the gym, EVERYTHING. Add it all up – don’t be afraid. This is something you should do every month, anyways. Now, subtract your bills from your expected income. In very rare occasions you may make enough in a month to pay off your Christmas debt. If this is the case, congratulations! However, if you find yourself in debt in the first place, you likely don’t make enough in 30 days to pay it off without making any additional sacrifices. If this is the case, proceed to step 3!

3. Use a jar for your cash.
Any loose change you find in your wallets, pockets, purses, car, dresser, sofa or counter should be thrown into a jar or a container of some sort – like a piggy bank. You’ll be amazed at how much loose change you have laying around the house for those occasions where you just need that morning coffee from Starbucks in order to function. If you have any bills lying around or if you babysit or tutor or do any other freelance work where you might be paid in cash, throw all those bills in the jar as well! Do not keep ANY cash on you, because if you are anything like me, the moment that money touches your wallet it is as good as gone. Control yourself – you can do this. It will be difficult to start this at first because it’s only a few dollars in a jar, BUT, if you keep up this habit for the entire month you will watch that few dollars turn into a few hundred.

4. Sell stuff on Kijiji or Craigslist

I know it sucks to have to sell your stuff to pay your debt but it’s important to shake debt off your s
houlders as early in the year as possible because it’s only going to drag you down. Besides, there must be something in your house that you don’t use anymore. Records, CDs, furniture, seasonal clothing (or really just any clothing), books or textbooks, your old iPod that you haven’t used in years because you got a new one. Take a look around – there’s bound to be something. Post it online and choose the free ad option because, let’s face it, you’re already in debt, let’s not make it any worse than it already is. Don’t be afraid to share this ad on Facebook – people sell stuff all year ‘round, no one is going to assume that you are broke simply because you’re selling your Yoko Ono record in January (tip: if you are planning to sell a Yoko record, just throw it in the trash – no one wants it).

5. Make your lunch and your morning coffee.
Realistically, this is something you should be doing all year around, no matter how much money you make because buying lunch every day is a complete waste of money, but, for the sake of this post, start making your lunch and your coffee to help pay off your debt. Simple things like rice or pasta are easy to make the night before, still taste great when reheated, have enough carbs to keep you going and will save you lots of money. If you don’t already own coffee or a travel mug, go buy one! But make sure it’s on sale! Coffee may seem cheap at the time because it’s only $2.00 for a cup but if you buy one every week day, that’s $40.00 per month when you can buy a tin of coffee grinds for about $10.00 and make coffee for 2-3 months. Do not give in to the temptation to buy your lunch. If all your work friends buy theirs every day and you feel super left out because, surprise, surprise it’s rice again for you, remind yourself that you don’t know what their bank statements look like. For all you know they are in twice as much debt as you and doing nothing about it. Suck it up and make your lunch. Better yet, just make this your resolution because you’ll save enough money this year by making your lunch at home that you’ll be able to backpack through Europe or Asia for a few weeks. Never been more serious in my life.

6. Budget yourself and stick to it.
Make sure you stick to a very strict budget this month. No need for fancy name brand foods, go to your cheapest grocery store and by the no name or house brand products. Buy the cheapest brand of bread on the shelf, the cheapest eggs, the cheapest milk. The cheapest of everything. Make a meal plan for your week, include breakfast, lunch, supper and snacks, list all the ingredients that you will need to buy to stick to this meal plan and only buy what is on the list. No chips, no chocolate bars or gum at the register. Only buy what you need to stick to the meal plan. Remember, pasta and rice are hella cheap. If your debt is outstanding, consider eating less meat and more carbs, as meat tends to be pricy.

7. Pick up extra hours at work or on the side.
If you’re in deep and following all the steps above still won’t dig you out of debt, try asking your manager for a few extra shifts at work. Post an ad online offering babysitting services or tutoring or snow shoveling. Find something that you can do on the side to bring in some extra cash. Maybe some freelance work.

8. If all of the above still don’t help…
Start planning an even stricter budget for February. Consider downgrading your phone plan, unsubscribing from some online memberships. Do you actually use your gym membership? If not, try to get out of it. Cut out some of the luxuries from your life until you can climb out if the hole, such as your morning smoothie, which, although you made yourself, frozen fruit is expensive and so is yogurt. Have a trusted friend or family member keep your credit card from you to keep you from spending more money. Check your online banking religiously and keep track of exactly what is left to pay. And start planning for next Christmas to insure that this doesn’t happen again!

I hope this post helps you rid yourself of your Christmas debt ASAP! If you have any questions or comments, I would love to hear them! I am not a financial expert; I just spend a lot of money, and as a result, have a lot of experience trying to pull myself out of debt. Enjoy a hopefully debt-free New Year!