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Downsizing Holiday Debt


Families often have leftover holiday debt hanging over their heads like a big dark cloud. What can you do to help these clients? Below are 5 time-tested debt repayment steps to consider using.

  1. Know What You Owe. Have your client make a list of outstanding consumer debts that need to be repaid. This includes various types of loans and credit cards. Ask the client to include the names of creditors, balances owed, the number of monthly payments remaining , and the dollar amount of monthly payments. Identifying how much he or she owes and who it is owed to is the first step to developing an action plan to get out of debt.
  2. Decide What You Can Repay. Ideally, your client will pay at least double the required minimum monthly payment. This one simple step can save hundreds, even thousands, of dollars of interest and years of debt repayment. Online credit calculators and the debt payoff table in credit card statements are useful tools to estimate how long it will take, and how much interest it will cost, to repay existing creditors.
  3. Increase Income and/or Reduce Expenses. Have your client track current living expenses for a month or two and identify spending leaks. Leaks can be plugged through reduced spending and the newly found money earmarked to repay debt. Clients can increase income via a second job, working overtime, or freelancing side hustles. They may also consider the sale of possessions online or at garage sales.
  4. PowerPay Your Debt. PowerPay is a free online Utah Cooperative Extension program that works by adding the number of monthly payments from paid off debts to monthly payments for existing debts. As each creditor is repaid, remaining creditors receive larger payments with freed up cash, which results in time and interest savings. To generate a PowerPay calculation, help your client prepare a list of creditors and the outstanding balance, monthly payment, and interest rate for each debt.
  5. Earmark a Windfall. Ask your clients about preparing their income tax return as soon as possible during tax season. Doing so can help them know what they owe.  If there is a tax refund, encourage your client to earmark all or part of it for debt repayment. Other common sources of additional income that can provide money for debt repayment are bonuses and overtime pay.

For additional content related to working with clients on personal financial issues, visit the MFLN Personal Finance Team. Free CEUs are available for AFCs, CPFCs, and CFLEs through our webinars.

Written By:
Barbara O'Neill

Edited By:
Selena Garrison
Program Coordinator
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This technology is supported in part by New Technologies for Ag Extension (funding opportunity no. USDA-NIFA-OP-010186), grant no. 2023-41595-41325 from the USDA National Institute of Food and Agriculture. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or the Extension Foundation. For more information, please visit You can view the terms of useat

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