Getting Your Finances Back on Track After the Holidays
by CashTime Loan Centers
The holidays are a wonderful time of spending time with loved ones, spending time enjoying good food, good fun, and good times, and spending time…spending. Joyous as they may be, the holidays can also take a serious toll on your finances. With a little planning and the use of a few hacks, however, it doesn’t have to be devastating. Here are a few tips to help you and your wallet get back on track after the holiday spending is done.
Take an honest assessment of the damage. Don’t beat yourself up but take an honest look at just how much damage you did to your budget. When you sit down after all the gifts have been opened and all the guests have gone home and actually add up how much you spent, you’ll know what you need to pay off and where you need to change your spending habits for next year so that you don’t end up in the same mess.
Make a payoff plan. Paying off credit card balances needs to be at the top of your financial to-do list. The faster you can pay off your holiday spending balances the better off you’ll be, as high credit card interest rates may hinder your efforts to get ahead financially if it takes several months to get back to normal. If possible, pay your holiday balance off within the next 90 days.
Learn from your mistakes. Make a plan for next year’s holiday spending to avoid getting into another financial hole. Write things down. Track how much you spend on various holiday expenses such as travel, dining out, gifts, clothing, etc. Once you have tracked exactly where all those holiday dollars went, divide those amounts into monthly amounts and put them in your budget now. Next year when the holidays roll around, you’ll be prepared with savings and your credit cards can stay in your wallet.
Make saving easy. If you’re not confident you can save for next year’s holidays without doing something differently, try setting up a separate account and putting the amount you’ve determined you need to save every month into that account via direct deposit. If you need to save $100 every month to hit your goal and you get paid twice a month, split that into two payments of $50 and send it directly to your Christmas account before you get a chance to spend it. You’ll be so much happier next Christmas when you have the cash and don’t have to take it from your regular checking account or put it on a credit card.
Implement a no spend month. This takes discipline, but it’s a great way to dial back your spending and get back in the habit of only buying what you need, not what you want. If you can make January or February a month where you only eat at home, use the groceries (and holiday leftovers) you have in your pantry, fridge and freezer, and don’t make any purchases other than gasoline in your car to get to work, you’ll recover faster and be more likely to carry that discipline forward into the rest of the year.
Give yourself a break. So you overspent this year, and now that you’ve put it all down on paper you’re glad you were sitting down when you did so. As we said in our first tip, learn from your mistakes but don’t beat yourself up. You can’t un-eat all that holiday food, and you can’t un-spend all those holiday dollars, so there’s no profit in looking back and wishing you would have done things differently. What’s done is done. Resolve to put your no spend, save more, necessities only budget plan into action and take the first step. In the new year, implement your new way of handling finances and before you know it, your credit card balances will be at zero and your Christmas fund for next year will be growing steadily.