Recovering From The Holiday Season
Every year is the same. The Holiday chaos sees us spending more, working less, and always failing to account for December when we do our budgeting. Spending money in December is incredibly easy to do. There is the pressure of buying gifts for your family, extended family, friends, and work colleagues. There is the added cost of decorations for your home, not to mention travel expenses. Then comes January, when the credit card bills arrive and the stress hits when we try to figure out how to pay off our debt and budget for the next year. Sometimes, this stress can continue for several months.
The best way to get your finances back on track is to have a plan. Here are some ways you can tackle your debt and stop things from getting out of control.
Evaluate the Damage.
First, collect your bank statements and credit card statements from last Christmas. Figure out exactly how much money you spent for the month of December. Now, break these figures down into categories. Much of the increased spending will likely fall into categories like Travel, Shopping, Dining Out, etc.
If you’re not already budgeting for these categories, then this is your first priority. If you are, then you should be able to tell how much money you need to allocate for Christmas.
Pay Off Your Holiday Debt.
Once you’ve identified how much Christmas costs you, you must pay the debt you’ve accumulated during the Christmas period. The worst mistake you can make is only meeting the minimum payments on your credit card. The interest and fees will stack up quicker than you realize, and you’ll end up with even more debt than you had to begin with. To put yourself in a situation where you’re paying more as time goes by does not make sense. Making a balance transfer to pay off a low or no-interest credit card is worthwhile, and it is a good way to avoid unnecessary charges. You could also set up automatic transfers into a holiday savings account. This will be easier on your finances than paying it off all at once, and you’ll be free of credit card debt with the arrival of the New Year.
Reconsider Your Budget.
Frequently reviewing monthly expenses makes sense and is a good habit to get into. The more you are watching your finances, the better managed they will be. Find ways to scale back, this will help you start the New Year in a better position. It is worthwhile renegotiating your cable, telephone or Internet package, or even downgrading. If your provider gives you a hard time, tell them you want to downgrade or have decided to switch providers – often times you’ll find that all manner of discounts will emerge. Also think about which everyday expenses can be trimmed. For instance, eating out fewer nights each month will save you loads. You could also try carpooling to work or social events, or cutting back on groceries by excluding pricey snacks and convenience food.
Be Savvy When It Comes To Gift Giving.
Put together a holiday in preparation for the following year. Think about what you’d like to get everyone on your gifts list at the beginning of the year, and get into the habit of watching for these items to go on sale throughout the year. Try not o buy these items at full price, only when they’re on sale. This way, you’re organized and you’ll have saved money when Christmas rolls around. “Buyers Remorse” will be a thing of the past, because everything purchased is a bargain.
If you’re expecting an end-of-year bonus at work, instead of spending it, perhaps you could consider saving it.
Expand Your Savings.
Lengthening your savings after the post-holiday shock by selling any personal belongings that are no longer of use to you. Jewelry, clothing or books are some examples. Make a bit of cash on the side by holding a garage sale or selling your items on eBay. Make sure you keep track of this extra income earned.
When it comes to budgeting, the smallest changes can make the biggest difference. Don’t wait until next year comes around! If you adopt these saving tricks, you’ll soon be an expert on recovering financially after the holiday hit.