An upbeat economy in which jobs are plentiful can lead to people making poor financial decisions. It's easier to justify overspending on the holidays in a market where it seems easy enough to make more money to cover your debt.

That's risky thinking, but at least it's a plan. What's worse is overspending during the holidays because you were swept up in the season. That's added debt without any thought as to its impact on your financial future -- a dangerous attitude that can quickly lead to major problems.

The 2018 holiday season was not a great one for people who take on debt to finance holiday spending. Consumers who do so ran up an average of $1,230 in debt this holiday time, according to a new survey from personal-finance website MagnifyMoney -- up from $1,054 in 2017, and $1,003 in 2016.

A chart shows holiday debt.

Image source: MagnifyMoney.

What types of debt are we talking about?

It's not very surprising that 68% of holiday debt is put on credit cards, roughly the same as last year, the report says. What's a little shocking is that personal loans were the second most popular way to finance debt, at 14%, followed by store credit cards (at 10%). Those were followed by payday loans (7%) and home equity loans (1%).

"Millennials with holiday debt spent the most on credit, with an average of $1,318. Gen Xers came next, at $1,272, followed by baby boomers, with an average of $1,186," the MagnifyMoney report says.

A pile of credit cards.

Credit cards are the most popular way to take on holiday debt. Image source: Getty Images.

What happens next?

Holiday spending that you can't afford is a short-term high with long-term consequences. Over half of survey respondents (62%) said they feel stressed by the debt they took on. That's roughly the same number that went into the season not planning to use credit or other forms of borrowing to fund their holiday spending -- which obviously didn't work out for them, because the survey was limited only to people who did in fact rack up holiday debt.

Nearly half of those surveyed (49%) expect to take five months or longer to pay off their holiday debt. In addition, 22% of that group expects to only make minimum payments.

"It would take more than five years to repay $1,230 in holiday debt if you make minimum payments of $30 a month at an annual percentage rate of 16.5%, which is the current national average credit card interest rate, according to recent Federal Reserve data. This would include a hefty $592 worth of interest," according to the MagnifyMoney report.

What can you do?

If you made poor financial choices during the holiday season, you can take steps to minimize how much they hurt you.

Your best move: Pay off the debt as fast as possible. Consider whether you can take on a side hustle to earn the money. If you can, think about whether you might stick with it long enough not only to pay off this year's debt but also to build a bit of a cushion so the same thing does not happen next year.

If earning more money isn't possible, then you have to adjust your spending. That means making a budget and sticking to it so you can throw as much money at your debt as possible. That may not be easy, but it's the right thing to do to make sure that your holiday weakness does not cripple your finances or cause you to miss out on things.

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