Enjoy the holidays a little TOO much this year?
Maybe you went into the season without a plan, and spent far more than you expected.
And now you have debt on credit cards, wiped out your savings, or have little left to pay your regular bills.
It’s not a good feeling. Believe me, I’ve been there.
Here’s some good news!
Now’s the time to fix it, and fix it fast.
The last thing you want is that holiday overspending to haunt you all year long.
Here are 5 ways to recover from holiday spending. And to make sure this never happens again!
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1. Assess the damage
I know, it’s painful. But you need to have a starting point.
Make a list of your credit card debts and their payment due dates. (Related: Free Printable Monthly Bill Tracker)
Even though it hurts to see it laid out in front of you, you’ll feel better seeing the actual number.
You’ll feel more in control of the situation, instead of having anxiety about how bad it is.
If you don’t have credit card debt from the holidays, check your bank balance to see how your overspending will affect paying your regular bills.
Pro-Tip: Use Credit Karma (it’s free!) to keep an eye on your credit, see what you owe, and make sure everything is being reported accurately.
2. Make a plan
Now that you can see the extent of the damage, it’s time to make a plan.
Figure out how soon you can have the debt paid off. If you can’t pay the bill in full (even with some major spending cutbacks), be sure to at least pay it on time.
The last thing you need is a $35 late fee tacked on!
To make any real dent in your credit card bills, you’ll need to pay more than the minimum payment.
The minimum payments are designed to KEEP you in debt. The banks love making money off you!
If you have several different credit cards, concentrate on paying them off one at a time. (While still making at least the minimum payments on each, of course.)
You can choose to pay off the one with the highest interest rate first, to avoid paying as much in interest.
Or tackle the one with the lowest amount owed first, to quickly feel like you’re making some headway.
And even if you don’t have debt, but have spent money intended for your regular bills (or used your savings), it’s time to change your spending habits.
3. Adjust your spending
Though you can’t change your past behavior, the great news is that you can totally change your future behavior!
In order to play catch up, figure out where you can cut back on spending.
Check your bank account or credit card statement online, and look at all the ways you spend money frivolously.
This isn’t about beating yourself up – it’s just a practical look at making different choices.
Here are some ideas to curb your spending:
- Eat dinner at home instead of getting takeout or going to restaurants. (You’d be shocked how much this actually saves!)
- Don’t shop – Stay out of stores, and off of websites that make you want to spend money. Unsubscribe from all those countless store sales emails.
- Do fun things…that don’t cost money! Here are 75 fun winter activities, most of which are inexpensive or free. (If you’re in the Southern Hemisphere, here are cheap summer activities.)
- Bring your lunch to work. If you grab lunch out every day, cut back to just 1-2 times a week instead.
- Host your friends at home instead of going out. Have a game night or movie night, or just hang out. It might be far more memorable than just another night out.
- Stop buying beverages. Whether it’s alcohol or fancy coffees (or even soda from the vending machine), beverages are really pricey! Make or bring them from home for a while.
- Do a pantry challenge. Try making meals out of the food you already have in your pantry, fridge, and freezer. You’ll be surprised how creative you can get, and how much skipping the grocery store can save you!
Whatever you do, don’t add to your debt. Stop using credit cards, or it’ll interfere with your payoff plan.
4. Use any extra money
Be smart with any extra money that comes your way.
If you got a holiday bonus, put it toward your holiday debt.
And if you still have debt when you receive your tax refund, use that. (Related: 10 Genius Ways to Use Your Tax Refund)
It’s a much better gift to yourself, compared to buying some crap you’ll soon forget.
Figure out ways to earn extra money! If you’ve cut back as much as you can, there are tons of ways to earn more.
Here are 21 ways to earn some extra cash. Remember, the sooner you can pay down your debt, the less interest you’ll pay. (And the more of your money you get to keep!)
Return anything you didn’t or won’t use. Clutter doesn’t pay the bills, so take back any purchases you don’t need.
Sell things! You can sell clothes and accessories on apps like Poshmark, or even at a local consignment store.
Household appliances (like that extra Crock Pot) and electronics always sell really well online too.
You’d be surprised what people will buy, so list anything you don’t want or need on sites Craigslist, Ebay, or Facebook Marketplace.
Use your gift cards! If you received gift cards to stores like Target or Amazon, you can use them for groceries or household necessities you may need right now.
There will be time later in the year (when you’re holiday-debt free) to buy yourself something.
5. Save for next Christmas
To make sure you never end up with a January holiday debt hangover again, save up in advance.
If you can save just $50-100 a month for the next 10 months, you’ll have $500-1000 next holiday season!
That means you can comfortably buy gifts, decorations, food, and holiday outfits without going into debt.
(Not to mention those Black Friday deals on things YOU really want.)
Wouldn’t that be nice?!
This simple act of planning ahead will do your future self such a huge favor.
Open a separate savings account, and set an automatic transfer for every month (or every payday).
You won’t miss the money if you schedule the transfer for right after payday.
And having it done automatically means you won’t even have to think about it, or spend it accidentally.
Just imagine getting to November or December this year, and having that money ready and waiting. It’s such a good feeling!
- 19 Things You Can Do Now to Get Ready for Christmas Early
- How to Create a Christmas Budget (and actually stick to it!)
- 21 Ways to Earn Extra Money for the Holidays
I know it’s difficult to face the truth about what you spent over the holidays.
But ignoring it only sets you up for future financial damage. Tackle it now, and avoid having it hang over your head all year.
I hope these ideas have encouraged you, and made you realize that you do have options for getting control of this.
It’s never too late to improve your finances. And everyone can do it!
To learn more about managing your finances, check out:
- Budgeting for Beginners: A Step by Step Guide for Getting Started
- The Best Personal Finance Books of All Time (when you REALLY want to change your life)
- Sticking to a Budget: 15 Budgeting Tips for Beginners
Happy New Year!