TAMPA, Fla. — Millions of people nationwide are in debt.
"Debt is a thief that steals from your paycheck. It steals from your joy,” said personal finance expert and Ramsey personality George Kamel.
It gets even worse from holiday spending.
“You go into January and February with all these bills and a lot of regret and some buyer's remorse about the spending you did,” said Kamel.
That’s what financial experts call the "holiday hangover."
With inflation being at an all-time high, they expect it to be much worse this year because many shoppers funded their Christmas expenses with credit cards and by dipping into their savings.
“The good news is there is hope that you can get out once and for all, but it starts with saying, ‘I’m done with the credit card game. I’m going to stick to debit cards where I’m using my money because you make decisions differently,'” said Kamel.
Experts believe the first step is creating a budget.
“Just writing it out, making sure that you can visually see your debt and truly show what that looks like as opposed to ‘I think I owe this and I think I owe that.’ That actually adds more stress to everything,” said Rocio Smith, market president for Achieva Credit Union in Hillsborough County.
“You’re not wondering where all your money went at the end of the month. Instead, you know exactly where it went because you planned for it,” said Kamel.
You can also ask for help from a professional if you’re feeling too overwhelmed from the holidays to figure out a budget yourself.
“Have that conversation with a banker afterward. Bring your statement, bring those bills and have your children come with you and talk about what happened during the year and what we can do differently starting in 2023,” said Smith.
The next step is starting to pay off the holiday debt. Financial experts suggest committing to that intensely, as soon as possible.
“That means we’re stopping investing, we’re stopping luxury spending, we are focused on attacking the smallest debt first while making minimum payments on the rest. We call that the debt snowball, and it’s how I got out almost $40,000 worth of debt myself,” said Kamel. “Key number one is just saying, ‘We don’t have the money, so we’re not buying it.'"
