Finally, the Holidays are gone, and so is the cash that you set aside plus more! Could you have gone overboard with your spending? If the answer is yes, you are in good company; 56% of Americans admit to spending too much during holidays, a situation that could lead to accumulated debts.
Fortunately, you still have a chance to stop the situation from getting worse while the year is still young. Here are ways of getting your finances back in order following the holidays:
Take Inventory & Budget
While looking back at how much you have spent and feeling guilty about it will only hamper your progress, taking inventory of your debt and expenses against your cash flow can help you make proper plans.
A budget will help you detect if you are overspending, keep track of your money and ensure that you prioritize the important things like utility bills, mortgage repayments, groceries etc. When you have done this, you are able to know how much extra money you have which you can then direct towards saving or reducing your debt.
Limit Your Spending
Holiday spending may sometimes get out of hand because besides buying what you need, you also spend extra money on things such as decorations, traveling expenses, buying gifts for friends and family, hosting meals etc. You can recover from this by ensuring that you only buy what you absolutely need and leaving wants for when you are doing better. These few tips can help you to limit your expenses
- Cash is harder to part with so keep your credit card and pay cash for your expenses.
- Resist the urge to buy things on impulse by sticking to a budget.
- If you must use plastic, go for a debit card.
- Use gift cards to cater for some expenses that you would otherwise pay with your money.
- Automate your recurring bills and debt payments to avoid added fees on late or missed payments.
Pay Off Your Credit Card Debts
After using credit cards for some or all of your holiday expenses, it is possible that you are dealing with higher than usual credit card balances. Can you pay them off in full and in time? If not, you can come up with several strategies to enable you to pay them off without accruing too much interest. You have several approaches at your disposal:
- Take a personal loan which comes at lower interest and use it to pay off your credit card debts.
- Put any extra money into repaying your debts.
- Stop using your credit cards to avoid racking up debt.
- Try to pay more than the minimum monthly payment but at the worst case try and make the minimum to avoid accumulating late fees on top of the interest.
- Move your balance to a lower interest rate card.
Look for Some Extra Cash
After a holiday spending spree, you need all the help you can get to repair your finances. This includes any extra cash that you can make. Depending on your schedule, what you have at your disposal and the sacrifices you are willing to make, there are a few ways in which you can do this.
Taking a side job,especially one that you can do at the comfort of your home is a great way to earn some money. Another option would be to collect things that you don’t need in your home and to sell them online or at a garage sale.
Don’t feel guilty if some of the gifts that you received end up in the list; they are better off helping you earn something than lying in your basement gathering dust and adding to the clutter.
You don’t have to pay the price of overspending or disrupting your finances during the holiday throughout the year; taking stock of your present situation and making the necessary plans can help you get your finances back in order while it is still early. While this may require making some adjustments, sacrifices and commitments in your part, acting on the above strategies will be worth all the effort.