New year, new bills? Here are five steps to get your debt under control 

Feeling overwhelmed by post-holiday bills? A new year is a great time to pay down debt and get your financial house in order.

The holidays are behind us, and now, you’re feeling overwhelmed by the bills coming in the mail this month, confirming the sneaking suspicion you may have overspent during the holiday season. You are not alone. Between holiday parties and gift-giving, it’s really easy to overspend and get off track with your budget and financial goals. It can be especially difficult when it’s time for those bills to be paid along with your ongoing expenses. 

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If that is the case, and you did overspend, how do you get back on track? Here are five steps to help you start:

1. Assess the damage. Don’t let fear lead to procrastination; go ahead and open up the credit card bill or bills. You should have balance totals and interest rates on everything; be honest about where you are and realize that even though this may be a financial setback (especially with the interest), it is not the end of the world. You can right the financial ship again! Write everything down and keep it handy as a visual reference of what you owe and the progress you are making in paying it off. 

2. Set up a payment action plan. This is the perfect time to strategize and plan how to pay off the debt or get your savings back on track. If you can, give yourself a deadline to have the debt paid off and if you find yourself overextended, speak to your creditors. Don’t let this debt have a negative impact on your credit; your creditors will often be more than willing to work with you on reducing your debt and getting you back on track. This is also a great time to put yourself in a “no-spend zone.” 

3. The “no-spend zone.” Yes, it sounds like a time-out — and it is, for your wallet. Resolve right now not to do any unnecessary spending for the next 6 to 8 weeks. This means no food delivery, afternoon coffee, after-work drinks, or eating out — and definitely don’t do any shopping! All funds saved should go toward paying off debt or rebuilding your savings account. 

4. Be clear on your “why.” Ask yourself why you went overboard with your spending. During the holidays, we all want to make special memories and enjoy that time with friends and family. But if you found yourself going overboard with your spending, ask yourself why and whether it was worth it — especially now that you are looking at the bills that have to be paid.

It’s also important to set up a budget and stick to it! A budget shows you where all of your money is going and how you spend your income. It lays out your financial situation in black and white, and it can help you save money. It is the most important financial tool you have — and it’s free! 

5. Make a saving plan. If you haven’t already, set up a savings account for the coming year. People do it all the time for things that they want; whether to take a trip, buy a car, or a home, we all plan and save. As a financial expert, I always say, “If you plan to spend, you won’t overspend.” So if the holidays are when you plan to go overboard, then set up a savings account now — so next holiday season, you are ready to indulge without breaking the bank!

Lastly, don’t spend too much time feeling guilty over what you spent. Now is the time to learn the lesson, pay off the debt, and do better. 

Jennifer Streaks

Jennifer Streaks is Senior Personal Finance Reporter and spokesperson at Business Insider and a financial contributor at The Grio. A nationally-recognized expert on money and affordable lifestyle living, Jennifer is an established financial columnist who has been featured on CNBC, Forbes, ABC, MSNBC, CBS, and more.

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