If you’re not feeling the January Blues just yet, you might be after opening up your next credit card statement and discovering how much all those holiday purchases added up to.
It can be hard to have your best-laid budgeting plans blow up in the last few weeks of the year. But for many of us, it’s difficult to completely steer clear of the shopping frenzy that kicks off around Black Friday and covers the gift-giving and celebratory season that follows. Pandemic or not, you probably bought a few (or a lot) more things than usual.
By the time the bills come due, of course, there’s often a healthy dose of remorse as you come to terms with the overspending. There’s never a good time to feel this way, but it’s extra tough for those already facing financial and personal stresses as a result of COVID-19.
If overspending during the holidays has put you in a financial disadvantage at the start of the new year, there’s no reason you can’t recover and get your budget back on track. Here are some of the things you should do immediately.
Start with a thorough review of your holiday expenditures
While it’s all still reasonably fresh in your mind, review what you spent money on during the holiday season and see how it matches up with any pre-holiday spending plan you might have made. Did you spend more than expected on certain people, or forget to include others in your gift budget? Are there items you could have done without? The better you’re able to understand your holiday spending, the better you’ll be able to budget for it next year. With a well-defined goal in mind, you can start saving now to help you pay for the next holiday season without going over budget.
Put an immediate pause on new spending, and slow down your shopping impulses
If you’re serious about controlling your spending, you need to slow down your shopping impulses and start displaying some serious spending discipline straight away. After the frenzied buying associated with the holidays, this can sometimes be difficult, although the retail closures caused by the pandemic may help. It’s also a good idea to unsubscribe from retailer mailing lists and resist the temptation to browse online stores. Some people even find that erasing their credit card details from e-commerce websites provides an adequate barrier to additional impulse buys.
Others pursue a purchase-free January, entirely eliminating frivolous purchases such as clothes or take-out food as part of a no-spending shock to start the new year. You might also use the opportunity to examine your spending on subscriptions and monthly services, finding ways to save money by making do with a little less. Ultimately, it’s all about having the self-control to say no to unnecessary purchases. The sooner you get control of your spending, the sooner your finances will recover.
Deal with any debt
If you’ve racked up more on your credit card than you can afford to pay off in the next two or three months, you’re going to need a plan to handle the debt. Steep interest rates on most cards make carrying a balance punitive, so act fast to avoid letting charges pile up and putting you in an even deeper hole.
If your debts are too big to handle alone, look into a personal loan, a line of credit, or some sort of consolidation option that lets you put everything you owe in one place, preferably with a more palatable interest rate. Then, come up with a plan to pay it all back as quickly and efficiently as possible. In a previous blog, we looked at different ways to manage debt.
Try to raise some revenue
If your income has been affected by the pandemic, you may have more trouble than most recovering from excessive holiday spending. If so, consider finding new sources of income to help re-balance your finances and dig out of debt. This could mean taking on additional work if it’s available, or setting up some sort of side-hustle, such as an online business selling your own homemade items. If you bought a big-ticket item that you don’t really need and can still return, don’t feel bad about taking it back. Other options include finding buyers to give you a few bucks for unwanted clothes, books, furniture, and other items from your own home, helping you raise cash while also clearing out unwanted clutter.
