Beat a new year financial hangover: Fast track credit card debt recovery and start this year feeling financially fit

Starting the new year with a financial hangover? Take control now, build a smarter budget, pay off credit card debt fast, and manage BNPL purchases to kick off the year financially strong.

Recover from a financial hangover and start the year strong

It’s a wrap! Decorations might still be lingering, and the leftovers are long gone, but reality is setting in, along with holiday debt. If your credit card balance is looking a little worse for wear, or you’re regretting how many Christmas gifts ended up on BNPL… we see you! At MyBudget, we get it, the festive season can add up quickly, and many Australians are waking up with a debt hangover when they’d rather be setting financial goals for the new year.

The good news? It’s not too late to take control and make 2025 your most financially confident year yet. With a few simple steps, you can get back on track, tackle your debt, and start the new year feeling financially fit.

The truth about December spending

While the final numbers are still being tallied, Roy Morgan predicted that Australians would spend a jaw-dropping $11.8 billion on gifts in the lead-up to Christmas, averaging $707 per person. But the spending didn’t stop there. The Australian Retailers Association forecasted $1.3 billion in Boxing Day sales as shoppers snapped up bargains during the holiday shopping frenzy.

Credit cards and Buy Now, Pay Later (BNPL) services made much of this festive generosity possible, but now, those December expenses are showing up on bank statements, and minimum payments might not even be enough to make a dent. Relatable? Don’t worry, you’re not alone, and we’re here to help you bounce back!

Steps to cure your new year financial hangover

First things first, let’s get you equipped with the tools you need to get out of debt. Download our free 6 steps to get out of credit card debt ebook. Head straight to page 3 and list your outstanding debts.

1. Make a list of all your debts

Before you can tackle your debt, you need to know what you’re dealing with. List all debts, including credit cards, BNPL accounts, personal loans, and even IOUs to friends or family.

Pro tip:

Be honest with yourself. Did you overspend this silly season? Take notes about what you’d do differently, and use tools like MyBudget’s Christmas Budget Template to plan ahead for next year.

2. Create a realistic budget

A good budget is your best ally when it comes to tackling debt. Start by:

Identify areas to cut back

Look for ways to reduce spending on dining out, subscriptions, or those unnecessary splurges that add up.

Allocate funds for debt repayment

Decide on a set amount you can dedicate each month toward paying off your debt.

Pick a repayment method that works for you:

Debt avalanche

Start with the highest-interest debts first. It’s the most cost-effective method, saving you the most money in the long run.

Debt snowball

Focus on paying off smaller debts first for quick wins that build momentum.

Feel-good method

Prioritise debts causing the most stress, like personal loans to family or friends, for emotional relief.

Need help?

If you’re not sure where to start, MyBudget’s free Personal Budget Template can help you map out a plan tailored to your individual needs.

3. Negotiate with your creditors

Generally, credit card companies won’t hand you a better deal unless you ask. This step is all about working with your creditors to make your debt more manageable. You might be able to:

• Set up a payment plan that suits your budget
• Enter into a financial hardship arrangement for temporary relief
• Negotiate lower interest rates or even have fees waived.

And here’s the good news: according to AFSA, banks and credit card providers are legally required to consider your request if you’re experiencing financial hardship. So, take a deep breath, grab your phone, and channel your inner negotiator.

Here are a few simple scripts to get the conversation started:

Ask for a lower interest rate:
“Hi! I’m struggling to keep up with my repayments. Is there any chance you could lower my interest rate to help me get back on track?”

Request a payment plan or hardship assistance:
“Hello! I’m finding it hard to meet my repayments. Could we set up a manageable payment plan or discuss hardship options you might offer?”

Waive late fees:
“Hi there! I missed a payment recently and was hit with a late fee. Is there any way it could be waived while I work on getting my finances back on track?”

Negotiating can feel daunting, but even small changes, like reduced fees or lower interest can add up to big savings. And if it all feels too overwhelming, our team of Debt Arrangement Specialists can take over the creditor negotiations for you.

Additional tips to boost your financial hangover recovery

When it comes to managing your finances, a few extra strategies can make all the difference in recovering from a holiday debt hangover and MyBudget’s tools can help you put them into action.

Automate payments: Set up auto-pay for bills, debt, and savings to stay consistent and stress-free.

Rebuild savings: Start small by saving from each paycheck, selling items, or using windfalls like tax refunds.

Track and adjust: Review your budget regularly and redirect extra funds toward goals.

Further reading: Does Afterpay and Buy Now Pay Later affect your credit score?

Feeling overwhelmed? MyBudget can help

Managing your finances doesn’t have to be stressful, our Personal Budgeting Specialists are here to guide you every step of the way. Whether you’re tackling debt, building savings, or planning for life’s milestones, we’ll create a tailored plan that works for you.

Here’s how MyBudget can help:

✅ Plan ahead with a 12-month view of your income and expenses
✅ Build a budget that supports your goals and lifestyle
✅ Automate your finances for stress-free management
✅ Create a safety net and savings plan to handle the unexpected.

You don’t have to do it alone.

We’re with you every step of the way. Our money experts are just a phone call away to help you achieve your financial goals.

With over 25 years of experience and more than 130,000 Australians supported, MyBudget is here to take the stress out of managing your finances. Ready to feel confident about your financial future? Enquire online today or call us on 1300 300 922.