Every January tells a familiar story: the Christmas lights come down, the last of the leftovers are eaten, and reality sets in with the arrival of credit-card statements. After weeks of festive generosity and a “just-this-once” approach to spending, many people find themselves facing the uncomfortable consequence of overspending in the form of a rather large credit-card bill.

While it can feel daunting, getting on top of your finances after Christmas is entirely achievable with a clear plan, the right mindset, and a few smart strategies.

Before tackling the debt itself, it helps to understand why we tend to overspend during the festive season, especially when this becomes a yearly occurrence.

For many, Christmas brings emotional as well as social pressure. The desire to give gifts, host dinners, or travel to visit family tends to fuel spending that often exceeds what is actually affordable.

However, festive spending on credit creates what can bluntly be called a “financial hangover”. Minimum monthly payments disguise the true cost of borrowing, and interest charges quickly accumulate. Recognising this pattern is the first step to changing it.

The first step towards regaining control is to assess your full financial picture. Gather all your credit-card statements and note down:

• The outstanding balance on each card

• The interest rate (APR)

• The minimum repayment amount and due dates

Having these details written out helps to replace uncertainty with clarity. Many people avoid looking at their total debt because it feels uncomfortable, but facing the numbers directly is empowering and converts vague worrying into a specific challenge that can be managed.

Once you know exactly how much you owe, you can begin to prioritise how to deal with it, especially if some debts cost you more in interest than others.

To effectively pay off debt, you must first increase your disposable income, either by strategically reducing your expenses, boosting your earnings, or raising some capital.

If you decide to reduce your expenses, begin by reviewing your monthly budget. First, account for all essential bills: housing, utilities, food, and transportation.

Then, examine your discretionary spending. This is where you will need to make sacrifices to free up money to pay down accumulated debt. As the saying goes: no pain, no gain.

On the other side of the coin, if you are already stretched and it appears there is nothing extra available to pay down the debt, then your second choice will need to be boosting your income and/or raising some capital.

Given that we are now in the digital age, freelance work is readily available online to anyone with a marketable skill. With a bit of research and a bit of creativity, there are quite a number of options out there.

Alternatively, if you are like me, over the course of many years you have collected a large number of household items that you simply do not use and that are collecting dust. I have many times listed items I no longer need or use to be sold on Facebook Marketplace — a great way to raise some capital that can be used to pay down debt.

Once you have figured out how you are going to increase your disposable income, you need to determine the amount available monthly to pay down your debt. The next step is to choose a debt-repayment strategy that works for you and that you can stay committed to.

There are two popular methods for paying off multiple credit cards: the avalanche method and the snowball method.

The avalanche method focuses on paying off the highest-interest debt first while maintaining minimum payments on others, whereas the snowball method involves paying off the smallest balances first to create momentum and a sense of achievement.

Both approaches work well if you are disciplined and follow the method. Whichever you choose, once you start seeing the debts disappear, it quickly gives you confidence that your approach is working and should help you stay committed until you are debt-free.

On top of the avalanche or snowball method, another important area is trying to make extra payments where possible. When it comes to tackling credit-card debt, one of the most effective strategies is to pay more than the minimum amount each month.

While minimum payments may keep your account in good standing, they barely make a dent in the balance because most of what you pay goes towards interest rather than reducing the actual debt.

By making extra payments, whether that is an additional 20 dollars or 100 dollars — you directly cut the balance faster and reduce how much interest builds up, saving you money in the long run. Even small increases in repayment can take months or even years off your total repayment period.

It is also important to highlight that, although successfully paying off the debt is an achievement, the true victory lies in staying debt-free. Transitioning from a mindset of repayment to one of sustainable financial health is essential for lasting freedom.

First, build a modest emergency fund. This cash cushion, ideally covering three to six months of essential expenses, is your primary defence against life’s unexpected costs, preventing a relapse into high-interest credit-card debt.

Next, adopt a zero-based budget. Allocate every dollar of your income, including portions for essentials, savings, and guilt-free spending. This proactive plan ensures you control your money instead of letting past habits control you.

Finally, make saving intentional. Automate transfers to savings and investment accounts immediately after payday. Pay for larger purchases with cash you have consciously saved for, rather than financing them. This habit shift transforms saving from an afterthought into a cornerstone of your financial life.

Staying out of debt requires vigilance and new systems. By prioritising an emergency fund, budgeting with purpose, and paying yourself first, you build a resilient financial life where debt is no longer a necessity but a choice you can confidently avoid.

• Carla Seely has 25 years of experience in the international financial services, wealth management, and insurance industries. During her career, she has obtained several investment licences through the Canadian Securities Institute. She holds the ACSI qualification through the Chartered Institute for Securities and Investments (UK), the qualified associate financial planner (QAFP) designation through FP Canada, and the associate in insurance (AINS) designation through The Institutes. She also completed a Master’s Degree in Business and Management through University of Essex

• For further inquiries or suggested topics, e-mail justaskcarla@outlook.com