The holiday season leaves a tangible financial impact on many, and with the New Year approaching, this time becomes ideal for reorganizing priorities and embarking on a more disciplined plan, especially after “discovering” the true extent of expenditures.
Shawn Biles from NerdWallet explains that spending often gets out of control during the holidays, because the desire to bring happiness to loved ones and buy what they “deserve” can lead to what is known as “holiday debt.”
The first step, according to Biles, is to assess the current situation: accurately identify debts, know their size, and develop a plan to address them, provided that it is realistic and not based on huge decisions that are difficult to implement. Instead, he suggests making small, sustainable changes, such as reducing restaurant visits once a month, or adopting a repayment method that can be adhered to throughout the year.
Regarding debt repayment, Biles suggests two well-known strategies. The first is “debt avalanche,” where debts with the highest interest are prioritized first to reduce interest payments in the long term. The second is “snowball,” which relies on paying off the smallest debts first to achieve quick gains that boost motivation and later help deal with larger debts.
Biles stresses that what matters most is not the name of the strategy, but that it is simple and sustainable. Small, continuous progress is better than ambitious plans that quickly falter, and starting these steps before the New Year gives a “head start” to financial habits that help get through 2026 and beyond. (news 5 Cleveland)
