Hide the Credit Cards: Tips to Recover From Holiday Spending

The holly jolly might end in January when your credit card bills arrive.

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Retailers certainly had reason to cheer this holiday season. In online shopping alone, consumers spent $42.8 billion from November to December, an increase of 10 percent from last year, according to the online data tracking service comScore.

While the retailers cashed in, many shoppers (despite their best intentions) often let holiday spending snowball out of control – leading to the inevitable holiday spending hangover. To prevent the tsunami of credit card bills, payments and overdraft fees from wrecking your finances in the new year, here are eight tips to set yourself on the right path:

Create a budget. It seems easy enough, but in practice it can be difficult to follow. One way to make sure you stick to your budget is to identify the areas where you overspent in 2013 and make adjustments that give you more room in for those areas this year. Also, choose personal finance tools that make budgeting easy and accessible so you can check your progress daily.

Tackle debt. Take a look at credit card bills, and focus on the cards that have the highest interest rates. Pay down debt first on these cards. There are a handful of online personal finance tools that allow users to create budgets, track expenses and set goals to pay off credit card debt easily.

Don't ignore the bills. While the easiest way to deal with holiday debt might be to pretend it doesn't exist, acknowledging those bills and making payments on time can save you from late fees.

Hide credit cards. The best thing to do to avoid overusing credit cards is to hide them or get rid of them. Can't seem to live without them? Try reducing the number of credit cards in your wallet to one.

Cash is king. Leave credit cards at home, and instead purchase items with cash or a debit card to easily track what you spend without incurring debt. Also, don't sign up for overdraft protection on debit cards, which allows for overdrawing on an account and could result in fees.

Avoid post-holiday temptations. Many people are lured by sales in January, and rightly so, since discounts can range from 60 to 80 percent off! But succumbing to these post-holiday shopping temptations can dig an even deeper financial hole for those struggling to get out of debt.

Return the unneeded and unwanted. Sell or return unwanted holiday gifts, and get cash for them instead. Use the cash to pay down holiday credit card debt.

Plan for next year. Put away some money early. Even just $20 a month can build up a cash reserve and help you avoid credit card use during the holidays. Shopping throughout the year is another way to break up your holiday spending so you don't spend so much in one month, and you can stay away from the seductive holiday sales during the busy holiday season.

Recovering from post-holiday spending doesn't have to be painful. Establishing better money habits takes organization and discipline so that you can make sound financial choices in 2014 and beyond. 

Hitha Prabhakar is a consumer spending and retail analyst and mint.com spokeswoman, the leading web and mobile money management tool that helps people understand and do more with their money.