Santa has come and gone, your kids think you’re the greatest parent in the world, and your bank has called twice reminding you of your unusually high credit card balance. The New Year is here, and it’s brought along its usual bundle of unrealistic resolutions, a few extra pounds around your waist and credit debt you acquire during the holidays and then spend six months each year resolving. This year can be different, and you can easily win in the catch-up credit game and start off your New Year – and years to come – on the right foot.

Still Paying for Last Year’s Holidays
Procrastination is not something you want to even consider right about now, especially since your credit cards are maxed out. “If you choose to ignore those bills in the ‘bill drawer,’ untold dust begins to pile up and so it's best to get all the bills out into the light of day as soon as possible,” says Dave Ramsey, a Nashville, Tenn., author of several finance books. “Even though Christmas is over, make a list and check it twice. Simply listing and totaling the damage makes fear slip away.” In other words, he says, by listing everything you owe, you’ll see the debt can be resolved. “Now do the dreaded ‘B’ word – a budget,” he says.

Getting your family on a budget is absolutely the next step, according to Mike Croxson, president of Amerix Corp. in Columbia, Md. After listing all of your credit cards, their balances and their interest rates, launch a payback plan, he says. “Focus on paying off cards with the highest interest rates first, then focus on paying off cards with the highest balances,” says Croxson. “Consider transferring balances to lower-rate cards as long as you understand all of the card’s terms.”

Also, “Don’t ignore the other balances,” he says. “Funnel a larger-than-minimum payment to the largest balances and send the minimum payment to the cards with lower balances. When you pay off the big bills, you should begin adding more to the minimum payments you were making on the smaller bills.” This can all become confusing, so don’t be afraid to ask a financial consultant for help.

If paying off your holiday debt doesn’t feel as though it’s that important and can be handled later in the year, consider doing this: “Go to www.ConsolidatedCredit.org, and check out the debt calculator," says Howard S. Dvorkin, founder of Consolidated Credit Counseling Services, Inc. in Ft. Lauderdale, Fla. "It will show you how much of your monthly payment will go to principal versus the interest, as well as how long it will take to pay off your debts. A $1,500 debt with an 18 percent interest rate could take you over 20 years to pay off if you only send in the minimum amount due. A minimum payment during the first year would be between $27 to $30 per month, and of that, between $18 and $20 would go toward the interest, leaving little to pay off your principal.”

To save a little extra money to put toward your credit bills, Dvorkin suggests not to pay extra money on your mortgage, don't eat out twice a week and don't do the daily latte. "Until you get that debt paid off, make it the priority,” he says.

Planning Ahead for the Next Holiday Season
"The last thing you want to do is find yourself in debt again this time next year,” says Chris Viale, of Cambridge Credit Counseling Corp. in Agawam, Mass. Start setting aside money now. For example, saving $15 every week throughout the year in a special savings account yields nearly $750 by the end of the year, explains David Chung from CreditXpert Inc.

You can also avoid overspending for the holidays, “…by setting appropriate expectations with children and loved ones and focusing on the non-commercial aspects of the family holiday, so that extravagant spending is not necessary,” Chung says. Parents and grandparents can also challenge children to prioritize wish lists and discuss which are the most important items listed and why. “Additionally, consumers can shop smarter by looking for sales, using coupons and comparing prices among various stores,” he says.

Rather than beginning your shopping the day after Thanksgiving, as many of us do, “Try shopping all year long, and seek out bargains and sales,” says Viale. “By avoiding the late shopping rush, you will be less likely to make large, impulsive purchases, and your purchases will be spread out on numerous bills instead of racking up all at once."

Shoppers can also cut back on their spending by leaving their cards at home, says Dvorkin. “Take cash instead, which will make overspending more obvious," he says. "Last-minute shoppers are unlikely to have saved up, which makes credit all the more tempting in a pinch.” He also says that sticking to a list reduces expensive impulse shopping, which is typically what gets people in financial trouble.

Finally, Dvorkin suggests “sleeping on ideas for gifts.” When you do hit the mall, make a list of where to get what and the costs. “Figure out if the costs for the various gifts are what you can afford, and if you know during the year that the item will be going on sale, wait until then to purchase the gift," he says. "For instance, in the spring, most retailers have white sales, so if you know Aunt Mary would love a quilt, plan to buy it when the white sales begin.”

Want to see more?

• Easing the Holiday Crunch: Tips to Lighten the Financial Burden
• Here Comes Santa Claus: Holiday Shopping for the Budget Conscious
• Save Money Now: How to Successfully Begin the Process
• Talk about it!