It’s the time of year when even the best-laid budget plans get thrown aside, and credit-card balances start climbing.

During the holiday season, it’s common to set expectations high, which can easily lead to emotional spending.

Tariffs and persistent inflation are taking bigger bites out of budgets this year, with roughly 4 in 10 Americans dipping into their savings while shopping, according to an AP-NORC poll.

If you went a bit overboard this year and racked up some major credit-card debt, you’re not alone. The National Retail Federation projects holiday spending to hit an all time, surpassing $1 trillion.

Lynnette Khalfani-Cox, a personal finance adviser and founder of the Financial Influencer Network, says roughly 75% of Americans are living paycheck to paycheck and almost everyone has some form of debt — whether it’s credit card debt, student loans, auto loans, mortgages, or buy-now pay-later obligations.

“Frankly, as a nation, we’re up to our eyeballs in debt,” she said.

Known as the “Money Coach,” Khalfani-Cox understands that burden firsthand. Early in her career, she found herself with over $100,000 in credit-card debt, which she managed to pay off in just three years.

“The debt problem in America has only gotten worse,” said Khalfani-Cox, and even though most people have the best of intentions for paying off their debt, life gets in the way and the struggle is only growing.

If you found yourself overspending this holiday season, here are some steps to take to best manage your debt and put your best financial foot forward in the new year.

Ask for help

According to Khalfani-Cox, the first step when navigating debt is simple: don’t suffer alone.

“Don’t let shame, guilt, or negative emotions keep you from getting help,” she says. “You can go reach out to nonprofits, to professionals, to experts who can help you to manage it.”

Nonprofit organizations like Savvy Ladies offer no-cost guidance from certified financial planners. Khalfani-Cox also recommends reaching out to professionals or financial experts who can provide guidance throughout your process.

Take inventory of all your debt

Taking a comprehensive look at all your accounts to figure out just how much you owe can be daunting, but it’s necessary.

Khalfani-Cox compares 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. The same goes for paying off debt.

Knowing exactly what you owe – across credit cards, loans, and especially buy-now, pay-later plans — gives you a clear starting point. It also ensures you don’t miss due dates or get hit with added fees and interest.

Negotiate

According to a survey from Lending Tree, more than three in every four consumers receive a lower interest rate from their credit card issuer just by asking.

“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,” says Khalfani-Cox.

Asking costs nothing, but it can save you valuable money and help pay off your debt faster.

If you’ve found yourself sent to a collection agency, there are ways to negotiate your delinquent debt down – or off your credit report entirely. Here’s what you need to know about negotiating with collections.

Choose a debt repayment plan

Financial experts often recommend paying off the debt with the highest interest rate first because it saves the most money long-term. While on paper that makes sense, Khalfani-Cox says it doesn’t always work.

“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,” she says.

That might be a nearly maxed-out credit card, or maybe it’s the one with the highest interest rate. Either way, paying off the debt that causes the most stress will help build momentum and motivation.

The common debt payoff strategies are the “snowball” or “avalanche” methods, both of which focus on paying off one debt at a time.

  • Snowball method: Pay off the smallest balance first to build momentum and motivation.
  • Avalanche method: Pay off the debt with the highest interest rate first to save money over the long-term.

With either method, you make at least the minimum payments on all debts in order to avoid any late fees and to keep a good credit. Whichever debt you deemed most stressful you contribute a little extra to. Once that debt is paid off you apply the same process to the next debt on your “high stress” list. This continues until all debts are paid off.

Paying the minimum amount due can help you avoid penalties and keep your account in good standing.

Consider a balance transfer

If you are carrying high-interest debt, a balance transfer may help.

A balance transfer is when you move debt from one credit card or loan to another in order to take advantage of a lower interest rate. Some cards will offer a 0% introductory APR for a set period of time. This can help you save money on interest and pay down debt faster.

If you decide to explore this, there are a few things Khalfani-Cox advises to pay attention to:

  • Transfer Fee:
    • Take a look at the fee that’s charged. The lower the fee, the better. Sometimes cards will have special offers where there’s no balance transfer fees, but most of the time, it will be anywhere from 2% to 3% and even as high as 5%.
  • Introductory APR period:
    • Make sure you take a look at the low APR term length to determine if it fits your needs. Some balance transfers will last 12 months, and others may last 6 months or 15 months. When choosing a plan, you want to give yourself as much breathing room as possible to account for any bumps in the road. Khalfani-Cox recommends that even if you think you can knock the debt out in 12 months, if there’s an option for 18 months, do the 18 months.
  • Read the fine print
    • Understand what happens if you don’t pay off the debt in full in your set amount of time. Does the interest that would have been accruing otherwise come into play once the 0% APR period ends? You want to make sure you fully understand all terms to make sure you are setting yourself and your finances up for success.

One word of caution: If having available credit might tempt you to spend more, a balance transfer may not be the right choice, Khalfani-Cox warns. But if your focus is paying down debt without added interest, it can be an effective tool — as long as it wont lead to new balances elsewhere.

The average American has more than $92,000 in debt, which includes credit cards, student loans, mortgages and more.

Find a way to make some extra money

Paying extra bills will be a lot easier if you find a way to bring in a little extra cash.

An easy way to do this is by looking around your home and finding items to return, resell or repurpose.

Consider returning that extra sweater you bought for yourself while holiday shopping. If you don’t have anything to return, try selling some extra belongings like old technology, books, clothes, toys, jewelry or even furniture. We all have things lying around the house that we no longer need, and this is one of the easiest ways to make a few extra dollars.

Have a tag sale, use an online marketplace, or sell old jewelry to a local pawnshop.

“If the goal is to raise money to be able 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,” says Khalfani-Cox.

Turning that extra clutter into cash is a great way to get started paying off that unwanted debt.

Dennis owns a successful barbershop.  Despite working long hours as a master barber, Dennis realized he needed an additional stream of income to become a debt free.  He decided to tap into another passion — grill master. 

Cut back on discretionary spending

One of the biggest ways to avoid debt is knowing exactly how much you’re willing to spend before you start. That means before you click “buy” on that new gadget or sneakers, set up a meeting with your wallet.

How do you actually make a solid spending plan for next year?

First, review what money you have available. Take a look at your budget, see what you’ve spent so far, and where you want to spend more.

Holiday costs go beyond presents. Outfits for special events, dinners, drinks, extra childcare, travel and hosting expenses — they all add up. If you don’t account for all these categories, you’ll be overspending before you know it.

That being said, there are plenty of ways to cut back on spending in the future. Consider skipping out on pricey gift exchanges. Office gift swaps can be fun, but everyone often ends up with unused items. Suggesting a strict low-cost limit or homemade gifts only rule can be a fun way to switch things up, and also gives your wallet a break.

Big party coming up? Instead of buying a new outfit that you’re only going to wear once, try renting your festive attire on sites like Nuuly, Rent The Runway or Pickle.

If you have a big family or a lot of adult family members, instead of exchanging presents with everyone individually, suggest doing a White Elephant or a Secret Santa. This can help you save money by buying only one gift and can also be a fun way to spice up the family get-together.

Holiday debt isn’t from one big purchase — it’s the small, emotional buys throughout the season that add up before you know it. Shopping with a list and a plan is simple, but it’s an easy way to keep track of your finances all year long.