The gifts are all given out and unwrapped. The parties are winding down and the reality begins to set in that maybe you stretched your wallet and your stretchy pants a little too far this holiday season. Fear not though, you are not alone, don’t beat yourself up; here are some ways to recover from holiday debt and plan for these lumpy expense times of the year a little better in the future.
Assess where you are financially. Do not hide from the credit card statements. Make a list of each card, it’s balance, minimum payments, and interest rate. Plan to pay off the higher interest balances first and see if there is a way to consolidate the balances on a lower interest rate card. Set a goal for how long it will take to pay off the debt.
Assess where you might be spending frivolously. Are you getting a latte every day but could make coffee at home? Eating lunch out when you can pack your lunch? Getting your nails done at a salon but can do them yourself. Check with your internet or mobile phone providers for specials or places to save in the plans you have.
Start planning and saving for next year’s holiday shopping or other spending goals you may have so that you stay ahead of the expenses.
Evaluate credit cards in your portfolio. Are there cards that have points you can use for future gifts? Are there cards with annual fees that you can downgrade or cancel to save on the annual fees?
Check your credit score and credit report. Understanding how high spending periods impacts your credit is important. It is important for you to check it for accuracy, and you can also set a goal for improving your credit score.
Know when it’s the best time to buy something and shop early. Shopping early will let you absorb the cash flow more evenly throughout the year and allows you to look for when the best sales of certain items may fall.
The beginning of the year brings tax returns and annual bonuses. Use these wisely. Do not look at these as free money to spend. Think about making a dent in any debt you may have or saving for next holiday’s spending plan.
Acknowledge where you are at, assess the situation, make a plan, put a pause on spending, and look ahead. Use this as a learning moment and an opportunity to get smarter about your spending plan in the future. It is a new year and you can have a fresh start with a new plan for avoiding this in the future!
