For many of us, January 1st marks a new beginning and a chance to improve ourselves. We make all sorts of resolutions including to lose weight, get in shape and become debt free. These resolutions typically follow a holiday season filled with overeating and overspending.

If the holidays left your wallet a little light and your credit card statement a little heavy, then here are 4 ways to get out of debt and get your budget back on track!

Review Your Budget in Depth

If you’ve taken on new credit card debt in the last few months, then your budget has changed, and you need to review where you stand. Sit down, and make a list of all your monthly expenses including the new minimum payment on your credit card.

Your net paycheck may have also changed with the new year due to a raise or change in medical withholding so it’s important to compare your new income vs. your new expenses. Sign up for a free BudgetTracker.com account if you need help tracking how much you spend. After all you’ll never get out of debt and stay out of debt if you don’t truly understand where your money is going every month.

Challenge Yourself to Cut Your Monthly Spending

If you’ve reviewed your budget and found that there is little left over to save or pay off credit cards, then you need to cut your expenses. It will take time and research, but most of us have bills we can reduce or get rid of completely.

For example, you could call several home and auto insurance companies to get new quotes, and see if you can lower your bill. Call your current cell phone provider to find out if they have any new offers or plans that could save you money. If possible, consider refinancing your car payment. If you’re paying back federal student loans, review your repayment options, and make sure you’re signed up for the best plan. Also, read our article on “5 Monthly Fees & Subscriptions You Shouldn’t Be Paying” to see if there are any other items you could cut from your budget.

If you are able to lower your monthly bills by even $25 or $50, use that extra money to pay down your debt. Set up automatic payments so that you aren’t tempted to spend the extra money.

Consider Bringing in Extra Income

If you aren’t able to lower your spending, then you may need to increase your income in order to get out of debt faster. Consider websites like Upwork.com or Freelancer.com that can help you find extra work in fields such as customer service, marketing and IT. Care.com can help you find part time babysitting work, or if you are particularly knowledgeable in a certain field, consider signing up to be a tutor using Tutor.com. Check out our article on the “Top 5 Websites to Help You Find Work-from-Home Jobs” for even more ideas.

You might also want to consider if now is the right time to ask for a raise or apply for a promotion. Once you are able to increase your income, be smart with your extra take home pay.  Make sure you use the additional money to get out of debt and not increase the amount you spend.

Set Up a Holiday Savings Fund

If every year you overspend during the holidays, start planning and saving ahead of time to break the cycle. Open a separate savings account just for the holidays, and find out what types of savings tools your bank offers.

Several banks have programs that will automatically transfer money to your savings account each time you use your debit card. Bank of America’s “Keep the Change” program, for example, will round up each purchase you make to the next dollar and transfer the change into your savings. This is an easy way to build up some extra cash.

The holidays are supposed to be a magical time of year. It’s not supposed to be a time to rack up debt that haunts you for the next several months. If you felt discouraged looking at your January credit card statements, commit to not using your cards again until your balances are paid off. It might take sacrifice and hard work, but the feeling of freedom that comes with being debt free is worth it!

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