6 Steps to a Realistic Debt Repayment Plan

4. Shop Around for Low Rates

If it's not realistic to pay off our holiday debt (or earlier debts) in just four months, but you think you can pay off your total debts within a year, consider consolidating your balances to a low-interest or zero-percent interest credit card. This strategy can help you save some money on interest charges and make it much easier to whittle down that balance.Just make sure you're aware of what the interest rate increase will be after the promotional period is over or you could be back to paying extremely high interest charges on the remaining balance. Check out websites like CardRatings.com, a free credit card comparison site, to shop around for the best credit cards offers based on your credit rating and spending patterns.

5.  Return Unused Items

If you made a few too many purchases this holiday season, check the store's return policy and head on back for a return. Most stores will process the return by putting the balance right back on the credit card you used. Don't use the excuse of potentially gifting someone with the item. Just return it and lower your credit card bill.

6.  Rework the Budget

If you're determined to pay off your holiday debt within a few months, it may be time to revisit the budget. Re-evaluate your budget to see if you can eliminate any non-essential expenses, at least temporarily. This will free up extra cash that can be used for your debt payoff plan.

You might even consider taking on a part-time job so you can increase your income and use the extra funds to pay off bills and debts with ease. Reorganizing your budget – and your priorities – can help to keep you ahead of your finances after a holiday debt hangover.

Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, television and radio personality, and a regular contributor to AARP. You can follow her on Twitter and on Facebook.

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