Even if you started the holiday shopping season with the best of intentions, shopped sales and read up on how to save this time of year, you may be finding yourself in post-holiday debt. Many of us didn’t save as we planned and overspent and now we’re dealing with a debt hangover. Life in 2021 will be challenging enough without money guilt from the holidays hanging over you and these tips can help you bounce back and get spending under control, fast.
- Don’t beat yourself up - If you got carried away buying presents, try not to waste time feeling bad about it. Spending time agonizing over where you could’ve saved more money won’t help, instead, use your energy and time to create a plan to get your finances back on track going forward.
- Put a pause on spending - Now’s the time to stop spending, except for essentials. Take a break from using credit cards while you pay down your balances and get out of holiday shopping debt.
- Assess the damage - When you stop adding to balances, take a step back and look at how much you actually spent and what you’re going to owe. Get all the numbers on one spreadsheet or even a piece of paper so you can look at the big picture and make a budget to get back on track.
- Plan it out - Now it’s time to figure out how to tackle the debt situation. Ideally, you can use discretionary funds - like from your unused travel fund - to pay off credit card balances, but most of us will need to pay them down over the next few months. Try to do it as quickly as possible and start with the card with the smallest balance and move on from there.
- Free up money - Try to come up with additional streams of income, like selling items from your cluttered closet or selling those scarves you’ve been knitting. Also, cut down on spending that comes with a few, like food delivery. If picking it up saves you money, start doing that to cut down on spending.
- Look ahead - Use this holiday spending debt as a learning opportunity to help you be realistic about spending and saving your money. Learning how to budget can help keep you on track in the future and it’s not too early to start preparing for next year’s holiday season so you don’t wind up in the same spot again.
Source: Real Simple