Are you facing the post-holiday #debt hole again? Let’s get you out of it!
The holidays are over, and if you’ve gone over budget with your spending, it’s time to deal with the aftermath. Instead of living in a financial deficit, take steps to repair your budget as soon as the last guest leaves.
Here’s how you can get your budget back on track for the new year.
Review your holiday spending
Before you take steps toward financial post-holiday recovery, take stock of your finances. How much credit card debt did you rack up this season? Did you dip into a savings account that now needs to be replenished? Spend some time crunching the numbers so you have a better idea of what kind of recovery steps you need to take now.
Choose your recovery process
Once you’ve got your numbers clear, you’ll need to decide on a path toward recovery.
If you’ve really blown it this season, and you’ve got multiple credit card balances to pay off, you may want to consolidate your debt. You can accomplish this by taking out a personal/unsecured loan and then using the funds to pay off your credit card debt. You’ll be left with a single, low interest payment to make each month.
Alternatively, you can pay off one credit card bill at a time, maximizing payments on the bill with the highest balance, or the one with the highest interest rate, until it’s completely paid off. Once you’ve crossed one balance off your list, move on to the next until you’re debt-free. Don’t get stuck paying just the minimum balance on each card each month, or you may be paying those credit card bills for years to come.
Trim your budget
Take a close look at your monthly spending to find places to cut back. Are you paying multiple subscriptions each month for apps you never, or rarely, use? Those small fees can add up quickly. Can you cut back on your grocery bill? Perhaps you’re overdoing it on takeout or dining out. Is there any way you can negotiate with a service provider, such as cable or internet, for a better monthly rate? Maybe it’s time to shop around for a less expensive auto insurance policy. Trim the extra wherever you can to free up more money for paying down debt.
Put your holiday resources to work
Along with a pile of debt, the holiday season may have left you with some extra cash through work bonuses, tax returns and gift money. Put these resources to work by using a portion of this money, or even all of it, toward paying down your holiday debt. It may sting to use “extra” money for something as utilitarian as a credit card bill, but getting rid of the debt faster so you can return to your normal spending patterns can motivate you to make this choice.
Go on a shopping detox
Before the holidays, you shopped until you dropped and then you may have shopped some more. Now, it’s time for a shopping detox. Take a break from the mall this month and close all those open tabs presenting your favorite clothing brands. Resolve to swipe the plastic only for essentials this month, or at least to keep discretionary purchases to a minimum until your budget recovers. Trimming expenses is never fun, but remind yourself that it’s only temporary until you’re financially fit again.
Make a plan for next year’s holiday season
It’s never too early to start thinking about next year’s winter holidays. Instead of using the months before Christmas stressing out over how much you’re spending, and the months after the holidays stressing about paying your bills, pay a little bit toward your holiday expenses each month of the year for a much less stressful holiday season. When you open a holiday club account at Pinal County Federal Credit Union, you can set up an automatic monthly transfer from your checking account to feed your holiday savings.
If you blew your budget this holiday season, you’ll need to take steps to help your finances recover. Use the tips outlined here to get started.
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