Overspent This Holiday Season? How To Recover Financially From The Holidays!
With the holidays behind us, you might notice that your wallet is thinner than it usually is or you have a pile of holiday debt. The holidays are a wonderful time with family and friends and sometimes we just get caught up in holiday overspending. But, overspending can put a huge hole in your finances for months to come. Some people overspend during the holidays and don’t truly recover until they get their tax refund. Or they spend months paying off debt from the holidays.
The post-holiday financial stress is something that you can either run away from or you can face head-on. Dealing with the aftermath of the holidays as well as your poor financial decisions can be stressful, difficult, and time-consuming. However, if you deal with it sooner, rather than later, you can make an immediate recovery.
The sooner you work on paying off the holiday financial aftermath, whether it’s a small or not-so-small pile of debt, the less damage it will do to your finances.
Here is a step-by-step approach on how you can recover financially from the happiest, yet, most expensive time of the year.
Assess Your Current Financial Situation
Before you make any move, it’s important to examine your entire financial situation first. This includes your monthly budget, as well as your short and long-term financial goals.
Make a list of how much you spent over the holidays, all your debts, their due dates, minimum and maximum payment amounts, interest rates, and the timeframe in which you would like to clear your debt. Include how much money you have in your savings accounts and how many credit cards you are using.
Create A Plan And Stick To It
Creating an action plan is another obstacle. Despite the fact that creating a budget is one of the easiest and fastest ways to track your finances, the majority of people in the United States just don’t do it.
If you are looking to dig out of the hole that the holidays made to your finances, the first thing you should do is to create a budget that outlines your monthly finances. Having a budget planner will not only help you manage your money, but, it also helps you figure out how much you can afford to repay your debt every month.
Creating a budget does not need to be complicated! You need to make a list of your recurring expenses, including any one-time bills. Compare your total expenses to the amount of money that you take home every month. If you find that your budget is completely maxed out, then you’ll need to spend less on other items to free up some cash to pay your debt.
Select A Payment Strategy That Works For You And The Family
Consider paying off the credit cars that have the highest interest rates first and work your way down the list. Always pay on time and pay more than the minimum payment, if at all possible.
Cut Some Expenses
Remember your monthly budget? If it does not give you enough room for your savings, you need to think about cutting down some expenses to pay your debt. You may slash a couple of smaller expenses or reduce the major expense in your transportation, housing or food.
How will you choose which expenses to cut to pay off your debt quickly? It really depends on your lifestyle. If giving up your weekend entertainment, morning coffee or sandwiches for lunch will result in misery (and eventually, retail therapy), you might consider downsizing your apartment instead. Or if you live in a spacious home or have a car to go to work, you may cut back on leisure and store-bought lunches.
The key here is to free up more cash from your budget to pay off your debt. Eventually, once you paid all your debt, you can use the extra money to add to your emergency funds.
Get A Side Hustle
If you don’t have enough wiggle room on your budget or you want to immediately pay your debt, getting a side hustle is a great solution to end your debt problem.
If you are willing to work on a second job, you will get extra money to pay off your bills. Believe it or not, out of 44 Million Americans who have a side gig, more than one-third of them are bringing home at least $500 a month!
You might like this: 12 Ways To Make Extra Money On The Side!
Return What You Don’t Want Or Need
You might have plenty of holiday gifts that are just sitting around — these include gifts that you don’t want or need.
If you still have the receipts, return them. You may either get cash in exchange or if you can get store credits.
Maybe you received a lot of things during the holiday season — even if you already have them or you don’t know where to use them. You may sell some of it, either online or by holding a garage sale.
The extra cash that you get from selling that tablet can pay down your mountain of debt.
Check Out This Article: 10 Yard Sale Hacks That Everyone Needs to Know!
Stop Spending Frivolously
It may sound simple, but, stopping any frivolous spending can help a lot. Take a financial diet and try not to spend money on other non-essential items until you pay off all the extra debt you incurred during the holidays.
Cut back on your daily expenses by doing your own nails instead of going to the salon. Carpool to work to save on gas. You can also take your lunch to work or make your coffee at home.
Take advantage of free leisure activities. Instead of buying a movie ticket or going out for dinner, go to the park or visit a free museum or art exhibit. You might also organize a potluck dinner with your friends.
Together with these changes, you may save a total of $5,000 savings in a year.
Proactively Save For Your Holiday Shopping This Year
It is never too early to start saving for the upcoming holiday season. Start a holiday shopping budget and set aside money for it. If you put at least $100 every month, you will have more than $1000 you can put on gifts or travel.
No one wants to start the new year in debt. By following these guides, you will have a cleaner and better 2019.