On average, Australians plan to spend $955 over the holiday season. Most use savings for Christmas presents, but 46 per cent use a credit card, and another 4 per cent take out a loan.

The average credit card debt after Christmas is $1,666. Most people will pay off their credit card debt within six months, but 18 per cent of Australians take a lot longer. Some will never pay off that debt.

So, now the tinsel is packed away, and the Christmas dust has settled, how do you manage Christmas debt?

Here, we share some handy hints for entering the new year on a lighter note.

Christmas spend debt

Plan and prioritise

Look at how much you spent over the Christmas period. If you spent using credit, you need to think about the interest payable on what you’ve spent, and plan how quickly you can feasibly pay the debt.

Break the debt into manageable chunks. For example, if your debt is close to the average $1,666, look at paying off $100 each week. Your debt will take about four months to pay off at this rate. And if you can comfortably pay off more each week? Great.

Prioritise debts that incur higher interest rates, to bring your overall costs down.

Consolidate your debts

If you have more than one debt, you can talk to your Smartline Adviser about debt consolidation, which means combining more than one debt into a single loan. It can be easier dealing with one lender, and with your loans in one place you will have less paperwork. You may also achieve a lower interest rate, particularly if you are consolidating debts with your home loan.

Be aware, though, that fees may apply. These include application fees and exit fees. There may also be government taxes to pay. Be aware too that you are extending the lifetime of your loan. Repayments may be smaller, but you are paying for longer. Your Smartline Adviser will help you weigh up the pros and cons.

Limit spending

January and February are good months for tightening the financial belt, and limiting your spending. Work out your weekly budget and try to limit extra costs like meals out, or retail spending. Focus on paying back your debt as quickly as possible. And if all goes to plan and your debt is paid off soon into the new year, consider putting money away in a high interest savings account, so you can save for next year’s Christmas season.