It happens every year. Susceptible shoppers find themselves surrounded by flashy displays and discount signs, tempted to slip that extra item into the cart. Another coffee mug for your sister, a cute holiday-themed stuffed animal for the server at the restaurant you frequent—one more thing couldn’t hurt, right?
It doesn’t, that is, until you notice bank account balance is suspiciously low and realize one thing turned into ten. Between the sales, stress, and other distractions, it’s easy to lose track of how much you’re really spending. This post-holiday overspending shock happens far too often. If you’ve fallen victim to it, don’t panic yet. There are ways to get back on track. Following some of these simple tips can help you can set your finances straight for the new year.
Know where you messed up
Look back over the past month and figure out where the money went. Did you underestimate the cost of travel or of having guests over for the holidays? Were you feeling pressured to give good gifts to your kids or family members? Did you just stretch yourself too thin?
Any of these reasons—and many more—could lead to a disastrous bill at the end of the season. The important thing is understanding your motive for spending and getting to the root of the issue. Most times, money isn’t the underlying problem. It’s guilt, or expectations, or even a simple desire to give generously.
Whatever it is, it’s ok. Now is the time to reflect and make sure the same things don’t happen again. Just remember: the cost of the gift doesn’t determine its value. A thoughtful card can sometimes go a long way.
Do some damage control
Not every bad decision can be reversed, but there’s a chance you could still return some of the items you bought for yourself on an impulse. Check with stores to see what their return policies are. Even if you can’t return items, you try to sell the things you’re not using. Set up a garage sale or list items on websites like OfferUp or Nextdoor.
If you received extra income during the holidays, use this wisely. Don’t look at holiday bonuses or monetary gifts as free money, instead use them to help you meet your goals. A big-screen TV might seem like more fun, but the increasing credit card debt is an urgent issue. If you’ve been tossed a lifeline after overspending, take it! Don’t throw your budget off even more. Gift cards work well for purchasing common items or satisfying your need to splurge. Cash is more versatile. It can be used for paying down credit card debt, saving, or put towards necessary expenses like rent or insurance.
Make a payment strategy
Debt can become a nightmare if not dealt with properly. When faced with multiple debts at a time, you should outline a strategy to help you pay them in the most efficient way.
Usually, it’s recommended you tackle the credit card with the highest interest rate first. This is the one that can do the most damage in the long run since the money you owe just keeps accumulating. After that, you can start tackling the others.
Curb unnecessary spending
Since the new year is still getting started, it’s a good time to take a second look at your regular spending. You don’t have to cut all discretionary costs but consider letting go of the things you really don’t need. Unused subscription services and the newest tech gadgets are good places to start. For daily savings, consider swapping expensive coffee on the go for a home-brewed cup, eating out for packing a lunch, or swapping a costly night out for a budget-friendly night in (pizza and a rented movie, anyone?).
Rebuilt good habits
Chances are the financial discipline you built up throughout the year was thrown out the window at the sight of sales and bargains. Now is the time to reacquaint yourself with the spending habits you held pre-Christmas.
Remember to put away a healthy amount in savings each month, pay towards your mortgage or other loans, keep an eye on your investments, and don’t forget to think about the long-term.
Start planning for next year
It might sound crazy, but you already know what’s coming. Once December hits, life is going to be a flurry of excitement, stress, and running from store to store in search of the perfect gifts. Set your budget now so you won’t get carried away later. But remember: you need to make a plan that reflects the financial situation you are really in. Goals are great to have—but not when they are unattainable. If you can’t afford to give a gift to your child’s teacher or your niece’s daughter, that’s ok. Think of alternatives, like a handmade item or a card, or just move on.
If you want to travel or have an especially high-cost gift to purchase, start saving a little each month for the goal. By starting now, you can spread the preparations over the year—and avoid that wave of pressure that comes crashing down during the holidays. It’ll also help you make smarter decisions. Without feeling the doom of an approaching date, you can relax and really think about the things you are spending money on.
Want to open a new account for your savings goals? Nuvisoin can help.
When it comes to planning for the future, even just a few months ahead, Nuvision has you covered. We offer a variety of savings accounts to help you meet different life goals, from IRAs to money markets and certificates. If you’re looking to set aside some extra cash for a future vacation or other holiday plans, consider opening a separate savings account or short-term certificate of deposit. To learn more about what we offer, click here.