What to do if you overspent during holidays

Tiffany Aliche, the Budgetnista, joins TheStreet to share some tips on what to do if you overspent on holiday gifts.

Transcript

00:00If you overspent during the holidays, then give us some tips.

00:04What do we do now for tackling the debt that we racked up during the holidays?

00:12Well, first, like I said, you have to make a list of who do you owe and what did you spend,

00:17just so you can get a clear picture, right?

00:19Then I want you to create a plan of how am I going to pay these things off.

00:22Maybe you can return some of those holiday gifts.

00:24Like, I was just looking in my closet and I was just like,

00:27I had these big plans for decorating my tree differently, and I didn't.

00:30So I still have some of the holiday decorations left over.

00:33And potentially, can you send some of those things back?

00:36Did you get gifts that you're not using that you can return and get that money back

00:39to use to pay down some of your debt?

00:41Before we know it, tax season is going to be upon us.

00:44April is not that far away.

00:45I would make a plan now that if you're going to get a refund,

00:48what can I do with that refund to start paying that back some of this debt?

00:52And at the very least, try your best to stop digging.

00:56Because what do you do when you're in a ditch?

00:57Put the shovel down.

00:58Your credit card might be a shovel.

01:00And you might need to put it down temporarily and say,

01:03I need to manage without it so I can actually pay off that debt.

01:06And lastly, if your credit score is decent,

01:09you could do something maybe called a balance transfer card.

01:13This is when you transfer your balance from one card that has a higher interest rate

01:17to ideally a card that has a promotional zero percent interest rate

01:21for sometimes up to two years almost.

01:23And this is how I paid off my $35,000 of credit card debt in my 20s.

01:27I did a balance transfer card.

01:28Now, oftentimes there is a balance transfer fee, typically around three percent.

01:32But even sometimes they have promotions for that too.

01:35But doing that means that when you're paying off that card,

01:38because you don't have interest,

01:39100 percent of your money goes to your principal and you pay it down faster.