With the holiday season in full force, millions of consumers will spend a ton on gifts and treats for loved ones, which may land some in hot water. Eighty percent of Americans are handling some form of debt in their lives, and many use the holidays as a reason to continue overspending. Not this time! By setting a budget and making smart money moves this holiday, you can lower the stress and start working toward reaching your financial goals.

Here are tips on how to factor your debt into your monthly budget and goals and how to know the best debt repayment strategy for you.

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1. Create a budget. First things first, you’ll want to put a monthly budget in place to understand how much of your income can be put toward paying off your debt. With the help of personal finance apps such as Mint, you can keep track of the amount you pay for all of your bills, and set a budget for how much you can spend on other necessities such as rent, groceries, and more. Once you determine how much money you have remaining for the month, you’ll have a better idea as to how to budget for the holidays, while still making progress toward paying off your debt. If you’re working with a tight budget, try cutting back on some of your unnecessary expenses, such as eating out for lunch, to make room for your holiday spending.

2. Cut back your credit card spending. If you’re trying to pay off your credit card debt, make it easier on yourself by limiting your credit card spending. Take a look at your most recent monthly expenses and see if there are any purchases that you could have refrained from, especially the ones that are not crucial. Then, use that as motivation to limit your spending next month. If you were planning to put holiday gifts on your credit card all the while knowing you can’t afford them, give yourself (and your wallet) a break! Get creative with your gift giving — try homemade meals or handmade gifts to earn yourself some DIY cred.

3. Prioritize your debt payoff. Don’t treat all of your debt equally; you may want to prioritize your payments based on the interest rate, due date, or if your loans are tax-deductible. Consider prioritizing paying off your loans that have the highest interest rate first. If you tackle these loans up front, you’ll pay less in interest, which can save you money over time.

4. Pay more than the minimum. If you pay more than the minimum balance on your loans, it will not only help pay off the overall balance quicker, but it may help improve your credit utilization ratio — a large factor making up your credit score. Credit utilization ratio is the amount of your credit card balance compared to your credit limit, so if this number is low, it will put you at low risk for defaulting on your loans. Paying above what is required puts you at a lower risk in the eyes of lenders, ultimately putting you in good standing to successfully get approved for loans in the future.

Thanks to the help of Mint and Turbo, you can manage your holiday debt and get back to normal in no time.

Share how you plan to bounce back after the holidays with us @BritandCo.

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