The end-of-year holidays can be a particularly indulgent time, full of looser schedules, crowded dinner plates and, yes, overextended budgets.Americans were expected to spend $902 on average on holiday expenses in 2024 — a new record — according to the National Retail Federation, which tracks consumer spending. If any of those expenses ended up on your credit cards, you might be wondering how to get your balances under control in the new year.Valerie Rivera, a certified financial planner based in Chicago, says it’s normal for her clients to see the start of the year as an opportunity to reign in spending.“I always equate personal finance to physical health,” she says. “It’s almost like you go on a binge in December and then in January it’s like, ‘Okay, time to detox and get my health right.’”If tackling debt is at the top of your 2025 resolution list, but you’re not sure where to start, these four steps can help guide the way.1. Know what you oweThey say you can’t know where you’re going until you know where you’ve been — and by “they,” we mean financial planners.Before making a plan, it’s important to list debts one-by-one, including the balance and interest rate, so you can get a true idea of what you owe, says Samantha Gorelick, a certified financial planner and accredited financial counselor based in New York City.Be forewarned, though: This may be the toughest step, because of the emotions in play.“We’re taught to feel ashamed of our credit card debt almost, and a lot of personal responsibility is layered on it,” Gorelick says. “But it’s often a systemic failure that leads to debt.”Maybe your wages haven’t kept pace with inflation, or your health insurance wouldn’t cover a big medical bill.No matter the cause, don’t waste time on shame, even if you just plain overspent. Many people find themselves in debt at some point and can find their way out.2. Commit to a payoff strategyOnce you have the full picture of your debt, it’s time to decide on a payoff strategy.Debt consolidation — the process of rolling multiple debts into one payment, usually with the help of a balance transfer card or a debt consolidation loan — is a good option for unsecured debts like credit cards.Consolidation makes the most sense if you can qualify for an interest rate that’s lower than your current debts.For example, credit cards have an average annual percentage rate of about 23%, according to the latest data from the Federal Reserve. If you use a debt consolidation loan to pay off all your credit cards at once, then pay back the new loan at 15% APR, you’ll save money on interest and can get out of debt faster by applying the savings back toward your principal debt.It can be hard to qualify for a balance transfer card, or a low enough rate on a debt consolidation loan, unless you have good credit. Gorelick works with clients to pay off a few small debts before consolidating, since this can bump their cr
