Did you wake up to a new year facing new credit card bills and a lower-than-expected bank account balance? If you went a little (or a lot) overboard on holiday spending last month, you’re not alone. Fortunately, we have the cure: A five-step financial recovery plan to pay down debt quickly and get your budget back on track.

1. Review your budget.
   Look at your monthly income and expenses to get a clear picture of where your money is going each month. Pay attention to any expenses that you can trim, even temporarily, as you work toward getting your finances back on track. For example, can you lower your car insurance premium by moving to a larger deductible or trim some premium channels off your cable bill? Put any additional funds (like bonuses) toward paying down credit card debt or rebuilding savings, as well as any funds you save from cutting expenses.
   
   
2. Create a timeline.
   Add up the total amount that you owe on your credit cards and determine how long it will take to pay off the balance, based on how much you can put toward the task every month. If your goal is to rebuild your savings account, decide how much you want to set aside each month to reach your goal. Consider setting up automatic transfers from your paycheck. You won’t miss the money as much if you don’t see it.
   
   Aim for measurable goals such as “I will pay $300 per month toward my credit card (or savings) to pay off my debt in three months.”
   
   Once you have a timeframe in mind, create a visual aid to help you track your progress and stay motivated. It can be anything from a spreadsheet on your refrigerator to notes on your mobile device.
   
   
3. Look for ways to boost your income.
   To find extra money each month, look for ways to earn more. For example, consider decluttering your home and selling items you no longer use, or take a temporary part-time job. Whatever method you choose, put all of the extra income toward paying off debt or rebuilding your savings.
   
   
4. Resist the urge to buy items you don’t need.
   Try not to make any unnecessary purchases while you’re working toward erasing holiday debt. To remove temptation, put credit cards away and consider paying in cash. When you do shop, get in the habit of comparing prices to get the best deal on items you need. But don’t cut out all the fun. For example, shop using any gift cards you received for the holidays, or, enjoy low-cost activities for the next few months to avoid going back into the red.
   
   
5. Start saving for next holiday season.
   Once you’ve paid off bills or refilled an empty savings account, take some of that money and set it aside for the upcoming season. By having a plan and starting now, you’ll have funds set aside when you’re ready to shop during the next holiday season — and you’ll be less likely to repeat last year’s mistakes.

For a convenient way to manage money, consider a mySpending card from Commerce Bank. It’s a reloadable prepaid Visa^® card that you can load with any amount to use for holiday spending. Or it can be a smart way to keep holiday funds separate from your checking account. For more tips to help grow your savings, visit your local Commerce Bank branch.

Also See

• How to build a budget that actually works
• How to control your debt to achieve your goals.