'Putting all those boundaries in place': How to pay off your holiday debt

The holidays are an expensive time for many people, leaving them with a daunting pile of bills; however, there are ways to tackle holiday debt that will help you start 2023 on the right note.

According to Candice Bakx-Friesen from Investor Smarts, this was a particularly tough year for holiday expenses due to inflation.

“We’ve got our day-to-day costs, which are so much higher, plus now all the Christmas debt too,” she said in an interview with CTV Morning Live on Tuesday.

She said it’s important that people don’t blame themselves or their partners when it comes to holiday debt, as it will just cause more stress and create more problems.

“Best is to not blame. It is what it is, and start from there,” she said.

To begin, Bakx-Friesen advises you to calculate how much you can pay towards your debt. She explained this involves looking at your budget and finding ways to cut back on expenses.

“The starting point is, you’ve got to know where you’re at,” she said.

“It’s easy to just ignore it, or say ‘this will go away.’ But you’ve got to look at it square in the eye and say 'this is the debt that I’ve got to deal with.'”

Bakx-Friesen said looking at variable expenses is the best way to cut back.

However, in cases where you need to spend money, Bakx-Friesen suggested looking for deals and trying to find affordable ways to use your funds.

“Maybe using everything up in the pantry that you can, not going shopping, avoiding Amazon,” she said.

“Putting all those boundaries in place so you’re not spending as much.”

She said that one thing that creates financial issues is credit cards, as often people have high credit card limits.

“The credit card companies seem to just give you a little bit more of a limit, and a higher limit, and a higher limit,” she explained.

“Then it’s easy to just spend and that’s where you get caught up.”

To deal with credit cards, Bakx-Friesen suggested cutting back on credit card spending and tackling high-interest debt. She noted that sometimes you can even negotiate with credit card companies.

“I had one person I was helping, they paid about a third, and the credit card company forgave the other two-thirds. So why not ask,” she said.

As you start paying off your debt, Bakx-Friesen said it’s good to celebrate your wins. However, it’s best to celebrate in ways that don’t cost money.

“It doesn’t have to be food related, it doesn’t necessarily have to be money-related. Just celebrate as you go, so you have that ongoing will to keep at it,” she said.

- With files from CTV’s Nicole Dube.