Recovering from holiday debt hangover in the new year

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    Dodging the holiday debt hangover 

From buying gifts to hosting dinners, the holidays can get pretty expensive.

Come Jan. 1, it’s time to pay off all those credit card bills and deal with the financial stress of the “holiday debt hangover.”

Financial planner Bjorn Amundson at Quarry Hill Advisors in St. Paul says if you find yourself in debt after the holidays, there are two roads you can take.

The first is called the debt avalanche method.

“Where you look at what your highest interest payment is, and you pay whatever has the highest interest rate and get that paid off as quickly as possible,” Amundson said.

The second is called the debt snowball method.

“You simply look at what credit card or what debt you have that has the lowest balance, and you put everything you can towards that one with the lowest balance,” Amundson said.  “Once that gets paid off, then that payment is freed up, and you can take the payment from that card and whatever free cash flow you have, and you can attack the next one.”

Another simple way to save some cash after the holidays is return your unwanted gifts for refunds. 

The post Recovering from holiday debt hangover in the new year first appeared on KSTP.com 5 Eyewitness News.