Here’s your holiday shopping recovery plan

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You snagged that hard-to-find toy, scored some amazing bargains or found the perfect meaningful gift for someone. You watched their eyes light up and faces smile.

Holiday gift giving leaves you with a warm glow—at least until the credit card bill arrives.

The average shopper spent $1,121 this holiday season, buying 14 gifts and adding more than $980 to their credit card balance. More than half don’t know how to pay it off in less than five months. Those who don’t make a plan for financial recovery could end up taking 10 years or more and ultimately paying more than $400 in interest.

But that doesn’t have to be you. A few simple steps will have you on the road to recovery from the holiday shopping blues. First, spend a bit of time relaxing and taking stock.

“When you feel overwhelmed, the best response is to slow down, pause, find some clarity, let the dust settle and then proceed,” says psychologist Joanne Frederick.

STEP 1: Check your statements.

Now that holiday shopping season is over, it’s time to assess the situation. Start by examining your checking and credit card statements to make sure they accurately reflect the purchases you’ve made.

If you find any errors, report them as soon as possible. Mistakes at the cash register are common during the holiday rush—but so is credit card fraud, which climbs more than 200 percent on Christmas Eve and Christmas Day. It’s also a good time to check your credit report for any mistakes that might be pulling down your credit score.

Now you can tally up your holiday spending and start figuring out how quickly you can pay it off.

STEP 2: Set a budget.

The more extra money you can throw toward your holiday shopping debt, the less interest you’ll pay over time. Depending on how quickly you want to knock out your bills, finding the extra funds could be as simple as eating meals at home for a while—or it could mean stripping your budget down to bare bones.

If you have multiple credit cards or loans to pay off, use the snowball method: Pay off the smallest balance first regardless of interest rate. Once one balance is paid off, apply the monthly payment you allocated for that card to the next smallest balance until it’s paid off, and so on.

STEP 3: Get ready for next year.

It’s never too early to start thinking about next year. More than half of Americans say spending too much during the holidays makes them stress about their finances. Avoid the extra worry by:

  • Setting a holiday spending budget for 2017. Unexpected expenses, such as extra gifts or baking supplies, are one of the key drivers of holiday overspending, adding up to an average of $288 per person. Our holiday budget worksheet helps you think about and budget for unanticipated expenses such as travel, eating out, guest supplies, gift wrapping supplies, shipping costs and more.
  • Taking our savings challenge. Avoid adding to your credit card balance next year by saving up enough money to cover your holiday spending. Our savings challenge is an easy way to save hundreds or even thousands of dollars in time for the coming shopping season. Using our 52-week timeline, you can save $1,378 in one year by depositing just $1 the first week and adding another dollar each week. Or follow our more aggressive plan to save $3,926 for next year.

You should be able to enjoy the holidays without the headache of extra debt. These simple steps can help you recover from this year’s shopping spree and start planning for a debt-free 2017.