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Did you overdo it this past Christmas? Couldn’t resist, eh? Didn’t stick to that deal you made with your family where all of you agreed to do a scaled-down, simple, old-fashioned Yuletide? There were just too many Star Wars things!

You’re not alone.

The average Canadian adult spends $766 on Christmas gifts. And 27% will spend even more than that.  61% of Canadians DID NOT SAVE FOR CHRISTMAS SPENDING. How’d they do it? You guessed it: credit.

Imagine inserting that kind of spending anomaly into any month other than December and what impact it would have on your wallet. Say September, for example. You just suddenly incurred almost a thousand dollars more in spending but with no offsetting increase in your income. And, we know from studies that a lot of Canadians are living paycheque to paycheque. They have no extra money. Yet we don’t think that way when it comes to the holidays.

So, if you overspent at Christmas, what can you do about it? Let’s talk Holiday Debt Repair.

Step 1: Assess the Damage

Put a figure on it. You know what you bought. And just to have it hit home even further, add another 20% on top of the cost of gifts for various Christmas-related things like extra eating out at the mall, extra food purchases, postage, shipping, gas, and a dozen or so low-soy extra-hot peppermint mocha light whip lattes – – at $5 bucks each.

When you have a figure, you can act. It’s the old adage “If you can measure it, you can manage it.” As we said, most Canadians spend $766 every Christmas, so OWN the problem. Time to face up.

Step 2: Put your credit cards away

You need to stop the bleeding. Credit cards are impossible to use if you don’t have them at hand. Put them in a locked place or give them to someone you trust to keep (a financial advisor or a family member). You’ll be amazed how little you miss them when you do this for a period of time. No more retail therapy, no more temptations. Repairing your holiday debt WILL NOT WORK if you keep adding to the problem.

Step 3: Make an austerity plan

Nothing good ever came without some pain. Now is the time to pay the piper. You need a good two months of a personal austerity program to reign in this little beast.  Only the essentials for 60 days. Watch Netflix or read a good book or play with your kids. This period will also serve to help you AVOID doing this again next year. You’ll remember it. The time will fly by.

Step 4: Pay your debts first

Instead of paying bills immediately when you get each paycheque, make a point of setting aside a significant amount for your credit card with the lowest balance (not the highest rate). Make sure your payment is significantly more than the normal minimum, otherwise you’ll be paying primarily interest.

Then sort out the rest of the bills with the rest of the paycheque or the next one that month. Paying a card off in full will be a tangible gain that you will actually notice. It’s a reward. Preferably do an auto-payment from your account to your debt of choice, or even get your payroll to do it so you never even see it. You won’t miss it then.

Step 5: Stay out of shopping zones

I can’t emphasize this enough: seeing is temptation. Even if you’ve been good enough to put your cards away, you WILL spend if you have the opportunity. So don’t allow the opportunity. You are in repair mode – you had your fun and now you need to pay up. Netflix it is…

If the problem is just too big – in other words, if you already HAD $20 or $30,000 in credit card debt and just added more over Christmas – then we may need to talk. You may need to be more aggressive in terms of a permanent solution. You could call a trustee to discuss a legal settlement called a consumer proposal.

You pay off all your credit card debts over time with no interest and at reduced principle but get to keep your stuff while doing so. Lots of people do this once the Christmas debt hangover sets in and they realize the scale of the problem.

Watch this space next November when I’ll have tips for avoiding holiday debt NEXT Christmas.