Maxed out? Try these five Stealth Elf moves to take control of your credit card debt

Your shopping nightmare finally happened.

You tried paying for Elf on a Shelf, chocolates, mitts, face masks, car tire rim cleaner and all the other stuff in your cart and your credit card was declined. All of them.

You knew this would eventually happen, but right before Christmas? Come on, Universe!

Maxing out is a traumatic financial experience. During the holidays, however, it’s a double whammy, layering on the guilt of ‘how could this happen at the most magical time of the year?’

Having worked in the financial well-being space for 18 years, I can tell you the only way to move forward and make this better — and still enjoy the holidays — is to deal with it. Right now. Dwelling on it and beating yourself up offers no benefits — making a plan, does.

Before I dish out my five Stealth Elf money moves to deal with your maxed out debt situation, here’s the scoop with gift giving — you’ve got to dial it way back. Gifts that cost nothing (or almost nothing), are good to go. That means DIYing, using points, regifting, acts of service and IOU’ing are perfect. Return the rest for refunds, to cut debt.

Stealth Elf Move 1 — Get organized

Stop all spending immediately, except for essentials like groceries, housing and utilities. Delete your credit card details from your digital wallet and leave all your physical cards at home.

Inventory what you owe (the balances), to whom (the lenders), and the monthly payments and interest rate on each. Note the available limit on each credit product. Using a spreadsheet to organize this info, you will know if you are 100 per cent maxed, more than that, or less than that.

Tally up how much you are paying every month to service that debt and compare it to your total income and essential costs.

It is normal to experience anxiety performing this most unfestive of tasks, but the stress fades once you know the full picture.

Stealth Elf Move 2 — At the speed of Santa’s sleigh, raise extra cash

If you have savings kicking around, use it to pay off your credit cards. But, if you don’t, time is of the essence to come up with some quick cash.

This is where you sell that Pilates reformer or massage table. Nintendo Switch, Sea-Doos, patio stones, snow blowers, designer bags — even if you love these things, it’s time to post all this stuff you rarely use for sale online (Kijiji, Facebook Marketplace, eBay, etc.). Heck, why not sell your extra holiday decorations?

If you’re behind filing your taxes, claiming your benefits, or are sitting on returns, you’ll want to do all of this at warp speed.

The proceeds you raise should go directly on your highest interest balance to reduce what you owe and create some credit space. If you can’t afford groceries or rent, however, this money should go to core living essentials.

Stealth Elf move 3 — Trim recurring costs

Extra shifts, overtime, more billable hours — even temporary work like dog-walking or house sitting — now is the time to do it all.

Cancel subscriptions, memberships and nice-to-haves, but hardly used. Any extra money you can earn in the coming weeks — including refunds, bonuses, converting loyalty points into cash — put it all toward your highest interest debt.

Bigger money moves like selling cars, getting a higher paying job, moving to a less expensive home or fundamentally changing your overspending habits can take time, but should be on your radar. For now, focus on quick moves that produce immediate savings, pruning expenses to the bare necessities.

Stealth Elf move 4 — Consolidate your debt to a lower interest rate

If you can consolidate all the credit card and high interest balances to a lower rate loan or line of credit, do it. This will bring down interest expenses, lower your payments with more of your money going toward the principal balance rather than interest. It will also free up cash flow.

Check your online banking portal to see if there is a pre-approved lowish-rate line of credit you could tap into to transfer debt balances and reduce payment expenses. You might have the option to ask a family member to consolidate your debt on their HELOC for you, and you simply make payments to them.

Your bank might also be able to quickly qualify you for a consolidation loan. If consolidating isn’t an option, the best way to crush your debts is to pay a bit extra each week on the highest interest balance. Trade in your gingerbread latte for a $10-a-week extra payment to the card costing 23 per cent interest. Once the highest interest balance is paid off, apply this method to the next highest interest balance and so on.

Stealth Elf move 5 — Soak up all the love and support from family and friends

Some of these money moves are going to feel icky, bring up difficult feelings and discomfort.

My advice is to share what you’re doing with the people that love you so that you aren’t alone in your efforts.

Chances are your loved ones don’t want you maxing yourself out on ‘stuff’ this season. It’s also nice to give people a heads-up that you’re not going to be spending much, and they can adjust their own budgets. They probably won’t want to spend $100 on your gift if you’re giving them an IOU (that could be awkward).

Their love and support might strike broader conversations about making a long-term plan to address unhelpful overspending habits.

They may encourage you to meet with a licensed insolvency trustee to see if a consumer proposal is the right next step for you (typically this is the route you take if you simply can’t keep up).

They might share further budgeting hacks to help you save and they’ll almost certainly be your cheerleader when the temptation to spend creeps up.

No matter the shock you’re feeling, hacking away through your debt jungle right now is the first step to getting out of this holiday season financial rut.

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.