At a Glance
- Holiday spending projected to exceed $1 trillion.
- Roughly 4 in 10 Americans dip into savings during the season.
- 75% of Americans live paycheck to paycheck and carry debt.
- Why it matters: The holiday surge strains personal budgets, pushing more people into debt that can linger into the new year.
Holiday spending tops $1 trillion, and a News Of Philadelphia-NORC poll shows that 4 in 10 Americans are dipping into savings to shop. The National Retail Federation projects holiday spending to exceed $1 trillion, a record high that fuels the debt surge. Lynnette Khalfani-Cox, known as the “Money Coach,” says about 75% of Americans live paycheck to paycheck and almost everyone carries some form of debt.
Lynnette Khalfani-Cox said:
> “Frankly, as a nation, we’re up to our eyeballs in debt,”
If you overspent this holiday season, here are practical steps to regain control and protect your finances in the new year.
Ask for Help
The first step is to stop facing debt alone.
Lynnette Khalfani-Cox said:
> “Don’t let shame, guilt, or negative emotions keep you from getting help,”
- Nonprofit organizations like Savvy Ladies offer no-cost guidance from certified financial planners.
- Reach out to professionals or financial experts who can guide you.
Take Inventory
Knowing exactly what you owe is like stepping on a scale before a weight-loss plan.
Lynnette Khalfani-Cox said:
> “I compare paying off debt to losing weight. Sure, you can say in the new year you’re going to lose 5 pounds, but you can’t be successful until you step on the scale; otherwise, you’d never know when you’ve hit your goal,”
Negotiate
A survey from Lending Tree shows that more than three-quarters of consumers get a lower interest rate just by asking.
Lynnette Khalfani-Cox said:
> “They’re going to say yes, because they want to keep you as a customer rather than have you do a balance transfer and go to the next credit card issuer,”
Choose a Repayment Plan
While the highest-rate strategy saves money long-term, many people prefer tackling the debt that causes the most stress first.
Lynnette Khalfani-Cox said:
> “The reality is psychologically, a lot of us resist doing that strategy over the long term. So what I tell people to do is pick your pain point, work with the debt that is bothering you the most,”
| Method | How It Works | Goal |
|---|---|---|
| Snowball | Pay off the smallest balance first | Build momentum |
| Avalanche | Pay off the highest interest rate first | Save money over time |
Consider a Balance Transfer
If you carry high-interest debt, a balance transfer can reduce the rate, but watch the fee and the introductory period.
- Transfer Fee: Typically 2-3%, sometimes up to 5%.
- Introductory APR period: 6-15 months; choose the longest that fits your plan.
- Fine print: Understand what happens after the 0% period ends.
- Caution: Avoid new balances that could tempt spending.
Find Extra Income
Bringing in extra cash eases bill pressure. Scour your home for items to return, resell, or repurpose.
Lynnette Khalfani-Cox said:
> “If the goal is to raise money to pay off your debts, selling those items that you aren’t really using and don’t need is a quick and fast way to get that done,”
Cut Discretionary Spending
Plan ahead and set limits before you click ‘buy.’
- Skip pricey gift exchanges or set a low-cost limit.
- Rent outfits instead of buying new ones.
- Use White Elephant or Secret Santa to reduce gift numbers.
- Keep a shopping list and stick to it to avoid impulse buys.
Key Takeaways
- Holiday spending tops $1 trillion, pushing debt up.
- 75% of Americans live paycheck to paycheck and carry debt.
- Managing debt starts with help, inventory, negotiation, and smart repayment or balance-transfer strategies.
By following these steps, you can turn holiday overspending into a manageable debt plan and start the new year on a stronger financial footing.
