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How to Deal with Credit Card Debt – Advice from Last Year’s Self

By Julie Jaggernath

Have you ever made a conscious effort to pay down credit card debt, only to abandon your resolve because the balances never seem to budge in the right direction? Maybe you’re frustrated because you’ve done your best to make extra payments and to hardly use the cards at all, but you still owe as much as you did before.

Advice from last year's self - look back at how you managed money, credit & debt. Learn from your mistakes.When faced with such a situation, a lot people start getting discouraged. They look back at old statements or stacks of receipts, only to see long forgotten purchases with hardly any “stuff” to show for all the money they spent. Looking back, some people even realize that they still owe holiday debt from Christmas last year.

Why Looking Back at Old Credit Card Bills & Receipts is a Good Idea

With the benefit of 20/20 hindsight, it’s amazing how much differently we view our choices! And it’s these new-found insights that can hold the secrets to getting back on track. While credit cards afford us a certain amount of convenience, the delay between buying an item or paying for a service and later receiving the bill can make our spending a distant memory.

July means that it’s halfway to Christmas and a good time to get some advice from last year’s self.

Before we go any further, jot down the first thoughts that came to your mind when you realized that you still haven’t paid off last Christmas. It’s these ideas and feelings that will help you create a plan to avoid another trip down memory lane.

Christmas Past – What Can You Learn from Last Year’s Spending?

Most people don’t set a budget for their Christmas and holiday spending. Then they shop based on their available credit limits or during a last minute rush and end up with credit card debt they can’t afford to pay off. Go back to your previous fall and winter statements and look at all of your purchases. Ask yourself:

  • Did you have a plan or did you just buy whatever was available and what seemed like a good gift?
  • Which stores or online retailers did you buy from most often?
  • When did you do most of your spending, e.g. before the holiday season got into full swing, throughout the fall and winter, or all at the last minute?
  • Did you spend impulsively on gifts for yourself?
  • Did you buy a number of big ticket items or spend a lot on travel? Maybe lots of small purchases added up?
  • Did you spend a lot on entertainment, either to attend functions, to stop by open-houses or to have friends in?

Christmas Present – Start Planning for Christmas in July

If you started planning for Christmas in July, what could you do differently so that you don’t repeat bad habits or expensive spending patterns this year? For instance, could you:

  • Spread the gift buying out over the next several months (e.g. tech and young adult gifts often go on sale during the back-to-school time)
  • Make a list, check it twice and stick to it (e.g. use an app on your phone so that you always have your list with you)
  • Make some gifts (by starting now you’ve got time) or put alternative gift ideas into motion (e.g. a subscription, annual pass or monetary contribution)
  • Shop around for travel deals or someone to share travel expenses with
  • Buy festive clothing now (shop after grad and wedding season sales)
  • Save a monthly amount towards your holiday shopping

Start Meal Planning Early

If much of your spending involves hosting the main meal, consider buying canned and specialty preserves around Thanksgiving in October. Ask if others would be willing to bring a dish or supply the dessert. By planning and shopping early you can manage the expense of the meal better. If you’ll be asking others to contribute, they’ve also got time to think about and plan for what they’d like to bring.

Create New Traditions That Help Avoid Debt

Everyone enjoys different Christmas and holiday season traditions. However, when looking back and reflecting on what means the most to you, friends and family rather than gifts likely top the list. Now, well before the holiday season, is a great time to talk to family and friends about how you can all still enjoy what you cherish most, while leaving the expensive parts behind.

When it comes to gifts, things to talk about include:

  • Organizing a gift exchange
  • Setting spending limits
  • Only buying for the kids
  • Drawing names
  • Making hostess gifts or avoiding them altogether
  • Ordering with credit card reward points

By talking about it now, well before the holidays, everyone can have their say and together you can come up with a plan for this year.

What If Others Don’t Want to Budget & Plan for Christmas So Early?

In the unlikely event that you’re the only one who wants to budget and plan for Christmas and holiday spending, let everyone know your plan. This will help you manage their expectations and avoid disappointments all around.

Christmas Future – You Know It’s Coming

For some people it’s easier to plan what to spend on a car purchase or bigger vacation (where we control the timing and situation), than on Christmas and the holidays (which roll around whether we’re ready for them or not).  Ask yourself why that is. Any significant expense requires careful consideration and planning. Christmas and the holidays should be no different.

Credit card debt and bills make for terrible holiday memories but serve as great reminders of what we don’t want to do. Use this opportunity to ensure you don’t repeat your mistakes. Incorporate learning new money management skills into your daily routine by tracking what you spend, creating a realistic household budget (that includes saving for gifts and special occasions), and paying down your debts.

Paying Off Credit Card Debt When We’re Halfway to Christmas

In July, we’re halfway to Christmas and if you’re still struggling to pay off credit card debt from Christmas past, stop letting it haunt you. Instead, let this time of year remind you that the holidays are about making memories, not mountains of debt. Take steps to deal with your debts, and if you need help, we’re just a phone call or click away.

Related articles:

12 of the Fastest Ways to Get Out of Debt

How to Avoid Christmas & Holiday Debt

5 Personal Finance Tips Most People Wish They’d Known When They Were Younger


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