Follow these six steps to get a handle on your holiday credit card fallout

The gifts have been opened, the food and champagne consumed, the decorations put away.

The dust has settled on another great holiday season. Now, it's time to pay the credit card piper.

Follow these six money moves to help you deal with your holiday bills — like a boss!

Quickly scan and assess the situation

Yes, this means you actually need to open the stack of mail you’ve been using as a coaster for your coffee this past week.

Lay out the bills on your kitchen counter. Grab your laptop and download the statements for all your credit cards, store accounts and grab a copy of any emails notifying you that you owe money.

Now, take 10 deep breaths. It’s a lot to look at, but believe me it’s better to see the whole picture than to get side-swiped by an unknown bill.

Get organized and cut yourself some slack

If you want to be successful with crushing these bills, don’t beat yourself up.

You’ll need that emotional energy for the rest of this plan. Certainly, you can learn from any overspending mistakes, but treat these reflections as lessons.

Now, grab your favourite spreadsheet or notepad (don’t go buy a new one! Use something you already have).

List each creditor, the total amount owed, the minimum payment, the date it’s due, and if there is any flexibility with the payment either being cancelled or delayed.

Organize it by the due dates, and mark each into your calendar so you don’t forget to make the payments, which is very bad for your credit score. Now, go ahead and schedule the payments (at least the minimums, but hopefully the whole balance) into your online banking.

If there’s a “renewal coming up” notice, but that renewal isn’t for something absolutely necessary, cancel it. Or, postpone until a better time.

Whip together a plan to raise extra money quickly

If you simply don’t have enough money to cover the bills, shift into money raising mode. Try these ideas: 

• Do all of your returns, and that might mean taking something back you wanted to keep, but simply don’t need right now.

• Purge and sell anything of value in your home that you can live without (I sold an old iPhone last week and raised $125).

• Take on extra shifts at work and sign up for overtime.

• Got freelance skills? Get hired by setting up a Fiverr or Upwork profile, or by letting your network know you’re open for business.

• If your credit card points can be converted into cash, consider applying that money to any expensive balances (where the interest is over 20 per cent).

• If someone owes you money, call in the loan.

• File your benefits claims.

• Catch up on your invoicing.

• If you’re expecting a bonus, earmark the bulk of it for debt elimination.

Stop spending money on all non-essentials until you’re caught up

It might mean you’re delaying the purchase of clothes or memberships until later this Spring, or simply doing a full spending detox. The theme while you’re dealing with all these holiday bills is to lay low, skip all unnecessary spending, and use whatever money you have to clear the balances you owe.

Use up what you’ve already purchased, fall in love with your clothes again by restyling them, and pay for essential purchases with gift cards or points. If you can scale your grocery shop down by half, do it.

Chop your spending for good by making a budget

The budgets that actually work tend to have a few things in common; tracking your spending is easy, insights about your household spending and habits are plentiful and there’s money you can afford being spent on priority items that matter the most to you.

The key is to balance money coming in with money going out, and ensure the holiday bills are being paid off. Only through a budgeting process can you identify opportunities to permanently chop spending by negotiating recurring bills and earmarking your money more efficiently. My pro tip is to set up a regular savings contribution towards an account that can be used for the holidays next year, so that you don’t find yourself in this same situation again.

Know when you’re overwhelmed by the bills, and need to consolidate

If you try all the above ideas and can’t meet your financial obligations, consolidation could be an option.

Consolidation rolls together your debts into one loan that should be at a lower interest rate, and at a lower total payment, than what you are currently paying for all of your debts today. This should free up cash flow to help balance your household budget, and simplifies your finances — one loan versus many. 

There are traditional loans with banks, lines of credit and nowadays a big trend in private loans with family members (usually at a lower interest rat, but may have strings attached, so watch for that). Explore these before considering a consumer proposal, which is last step before bankruptcy. 

It’s hard work to clear your holiday bills, but your discipline will pay off as each one gets eliminated, and your cash flow improves.

Celebrate key milestones with a reward that’s meaningful to you — but costs nothing!

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.