Smart Ways to Recover From Holiday Spending

Smart Ways To Recover From Holiday Spending

The excitement of festive spending may have stretched your budget further than expected, leaving you with a bit of financial strain. While it may not be as easy as taking down decorations, paying off holiday debt is possible with the right plan. These actionable tips can help you regain control of your finances and start the new year on a solid foundation.

1. Know where you stand.

   Go ahead, do it. Take a moment to review your bills and account balances. Though it may be uncomfortable at first, it’s essential to know the extent of your spending. Once you understand your financial situation, you can start making a smart and intentional plan about how to work your way back.

2. Ignore sales.

   BOGO! 20% off! $10 back for every $100 spent! After-holiday sales might seem too good to miss, but spending money on unnecessary purchases will only put you further away from your goal. Ignore the sales (for now) and put the money you would have spent toward reducing your holiday debt.

3. Stick to your schedule.

   Resist the temptation to ignore large bills that are due. Missing payments can hurt your credit and may lead to higher interest costs. If you can, commit to getting current and staying current on your bills. It may leave you with little spending money now, but you’ll thank yourself later.

4. Avoid using your emergency fund.

   Experts recommend keeping six to eight months of living expenses on hand. This helps you afford urgent and unexpected events, like job loss or medical issues, without going into debt. Dipping into your emergency fund to help you cover holiday splurging may seem like an easy way out, but it could put you in a difficult spot in the future. If you do end up using your emergency fund, try to replenish it as soon as you can.

5. Celebrate your progress.

   Budgets are most effective when they’re a team effort. Let friends and family know that you’re reining in your spending and focusing on saving for a while. They can help support you and make plans that are more in line with your budget goals.

6. Learn and plan ahead.

   You can’t change the past, but you can learn from it. Keep these lessons in mind during the big spending seasons in the coming year. Consider starting a “holiday fund” now by putting $10-$20 a week into a special savings account.

See more ways to get your new year on track and off to a strong start by choosing a budgeting style that works for you..

By Brooke Howell, GM Financial

Brooke Howell is a storyteller who loves digging up ways to improve money management and help others make smart financial decisions. She has three American Staffordshire terriers, one curmudgeonly Chihuahua and doesn’t do anything by halves (except marathons).