Your gifts are open, the Yule log is gone, and all that's left is that debt you accumulated during the holiday season.
Instead of avoiding it or moping about it, Ramsey suggests using the debt as a motivator to turn your financial life around. Once you've decided to, you can turn to Ramsey's four-steps to help you get out of debt and avoid the problem next year.
Most people overspend for the holidays, and most, according to Ramsey, tend to ignore the problem, pretending the bills aren't coming, and leaving them unopened when they finally do arrive.
"Any time we face disgust with ourselves, we immediately go into denial," Ramsey says. "We tell ourselves, 'Oh, it will be OK,' and turn on the ball game. Nobody wants to face their shortcomings."
A financial hangover, he explains, consists of strong feelings of regret. Buying all of those gifts seemed like a great idea at the time, but now it's post-holiday time, and you realize it wasn't such a bright idea, after all.
Ramsey urges people to use turn their miserable hangover into a motivator, similar to someone waking up with a post-alcohol-consumption hangover and deciding not to drink anymore.
"This," Ramsey points out, "could be the day you finally draw a line in the sand and say, 'I'm not going to live like this any more,' and that's a big deal."
Of course, if you're married, both of you need to come to this conclusion if you really want to turn your financial life on its head. Start talking to your spouse today about family money problems: Maybe you overspend, maybe she refuses to put money into savings, whatever the case may be -- you need to agree that it's time for a change.
Once you've drawn that line in the sand, be proactive about tackling your holiday debt. Statistics show that people are still paying off holiday bills six or nine months down the road. Don't be one of these people!
Ramsey says you should:
Examine your spending habits
In order to pay off your bills, you'll need to come up with some extra money. Take a look at what you're spending and see where you can cut back. By the way, this is called doing a budget, which makes many people recoil, but is a truly useful tool.
Use the debt snowball
Write out a list of all of your debts, smallest to largest. Each month, pay the minimum on each and then put any money that's left toward the smallest one. You'll quickly pay it off and then, suddenly, the money you were putting toward that particular minimum monthly payment is "extra," so you have that much more money to put toward the next debt on your list. This "snowball effect" is the best way to tackle credit card debt.
Have a "plasectomy"!
Of course, no debt program organized by Ramsey is complete without this essential step: Get out your cards and cut them up! Every single credit card has got to go. You'll never get out of debt if you continue to use your cards.
Save for next year
Once you've paid off your debt, start putting some of that money into a holiday fund for next year, so you can have a "green" Christmas!