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As the holidays come and go, many are excited to share gifts and celebrate with friends. However, depending on the purchases you've made during that time, it's possible that you may have accumulated a decent amount of credit card debt or dipped into your savings. While this may be overwhelming at first, the good news is that with the new year comes new goals such as saving more and bouncing back from holiday debt.

Build Up Your Savings

One way to replenish your bank account is to generate more income. This could mean selling items around the house that you no longer use or even picking up a side gig. Another good option is to pull back on discretionary spending to help you get back on track. Dining out at restaurants less and finding complimentary entertainment options are two relatively easy ways to save money.

You can also work with your employer to direct deposit a portion of your paycheck into a savings account to help prepare for a rainy day. Likewise, if you're expecting a tax refund, file early and ask the IRS to electronically deposit all or some of your refund into that same savings account. Most refunds are issued in fewer than 21 days.

Seek out Solutions to Pay off Debt Faster

Debt that has accumulated on credit cards can generate large amounts of accrued interest over time. Fifteen percent of Americans polled by YouGov claimed that a year later they were still paying off debt from the 2017 holiday season.

If you used a number of credit cards to buy gifts this holiday season or if you have other outstanding balances, consider consolidating what you owe. There are many options, and each can simplify your finances into one monthly payment, which makes it easier to budget. Debt consolidation can also help you pay down your debt faster by shortening the term for repayment, and it can save you money over time if you choose a lower-interest option. For example, if you have a number of high-interest rate credit card balances, you could transfer them to a single card with a lower-interest rate , and a 0 percent introductory APR — allowing you extra time to pay off holiday spending.

You may consolidate your debts into a fast and simple personal loan with a fixed interest rate and predictable monthly payments. Use a debt consolidation calculator to see how consolidating your loans could help you. Another option includes opening a preferred credit line, which offers access to ongoing credit and offers an interest rate structure lower than most credit cards.

Tap into Your Home’s Equity

If you've earned equity in your home, you may be able to borrow against it to help pay off larger debts. One offering that can aid with debt consolidation is a home equity line of credit, which provides a financing option in the form of a revolving line of credit with a low-interest rate. It offers flexible payment options including fixed rate payments to protect against rising interest rates.

Refinancing your mortgage with a cash-out option allows you to pay off an existing loan and replace it with a new one to access cash. You may also be able to consolidate your home loan and other high interest rate debt into a single payment with a better rate.

Your local lender can help you find a lending option that best enables you to take control of your holiday debt. And the timing of your post-holiday effort is ideal. Being proactive in a fresh new year can set you on a strong course toward financial wellness over the months ahead.


This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

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