For a lot of people, January reveals a post-holiday budget shock when they discover they spent a lot more than they intended at the end of last year. In fact, a 2015 study by LendingTree found that one out of every four Americans struggles to pay off holiday shopping debt. But the damage doesn’t have to be crippling. Get back on track financially after the holiday season with these tips to help you take back control of your finances.
Make a New Budget
A budget can help you clean up the consequences of overspending during the holidays. Subtract monthly expenses from your monthly income to find out what you have left over (this should be a positive number; if it’s not, look for areas to cut before moving on to the next step). Then set goals, such as reducing that post-holiday debt or padding your savings accounts.
Cut Your Spending
Eliminate unnecessary spending and cut back expenses wherever possible for the next few months. Some suggestions include:
- Cooking more meals instead of dining out.
- Searching for low-cost entertainment options such as free concerts, local sporting events or library events.
- Check your paid subscriptions, to television, movies, magazines and more, and eliminate those you no longer use or can replace with other, lower-cost activities.
Reduce Credit Card Debt
Making your debt disappear should be your top priority to get back on track financially after the holiday. Get your finances in order paying off high-interest credit card balances as soon as you can. Consider a credit card hiatus for a while so you don’t increase debt.
Supplement Your Income
Making a little extra money can help get you out of the hole from the holidays. Consider selling household items you no longer need on sites like eBay or Craigslist. You can have a good old-fashioned yard sale. You could also earn additional cash by requesting overtime, babysitting, tutoring or taking a temporary part-time second job.
Plan for Next Year
After spending way too much and digging yourself out, you probably think you won’t ever do it again. But chances are you could get caught up in the holidays all over, just as many people do. A smart move would be to try to get ahead of the game by budgeting for end-of-year festivities after paying back the money you spent in 2016. Spread out the costs throughout the next 12 months if possible, plan gift ideas early and watch for sales year-round. Find more tips to save on holiday expenses on the Midland National blog.