The holiday season is one of giving and generosity. That is, until you check your bank and credit card statements on January 1st and realize that, wait, maybe you were a little too generous. As you scroll through your lengthy holiday expenses – the food receipts, gift receipts, liquor store receipts (six bottles of champagne, oops) –you can’t help but feel a little (or a lot) overwhelmed by the amount you managed to spend in just a few short weeks. The damage is there, but instead of shutting your laptop off, and basking in stress, confront the problem head on. Follow these five steps to financial recovery after the holiday’s stress on your finances.
How bad is your credit card debt?
Nowadays, we swipe our credit cards left and right, and the swiping is so easy that we sometimes forget how much we’re actually spending. Hence, we easily over-spend, especially over the holidays where gift-giving is a must. If that’s your case (join the club), summon up the courage to review all of your expenses, pinpoint your debt, and build an effective pay-off plan to get the balance paid off sooner rather than later. Don’t procrastinate – you don’t want to start the new year with a piling mountain of debt.
Thinking of returning a gift?
As harsh as it sounds, think no more and return the thing (or things). If you don’t like it, you won’t use it, so why hold onto it? Think pragmatically, not emotionally, and fish out the gift receipt to the dog-printed robe your grandma gifted you this Christmas. Take the gift back to the store and get yourself some store credit. Didn’t get a gift receipt with it? As long as you know where the item is from, you might still be able to take it back for store credit. By doing this, you’ll have saved money for your next purchase – it’s as easy as that!
Are rebates worth looking into?
Yes, yes, and yes! Every little thing can make a big difference when you add it up, so don’t get lazy with things like rebates that can actually get you a good amount of cash back on some of your big ticket holiday purchases. Items like smartphones, laptops, televisions, and music systems are usually sold with a rebate offer during the holiday season, so use that. And do it soon – most rebates have expiration dates.
Can you still take advantage of post-holiday sales?
You most certainly can – and we recommend you do! As counterintuitive as it seems, buying items you need for the upcoming year, like new Christmas decorations and gym gear to compliment your new Crunch membership, means you won’t have to buy them for full price in the later months.
Can you budget?
Have you ever had the feeling that when your room is terribly messy you can’t think right? It’s almost as if the physical mess translates to a mental mess. It works the same way for finances: if your spending habits are chaotic, so are your personal finances. In order to recalibrate your financial compass, it’s important to budget, which means reserving sums of money for predetermined purchases (i.e. X dollars for food, X dollars for rent/utilities, X dollars for health, X dollars for eating out, etc.) Having a written note of what you’re planning on putting your money towards each month will help you remain mindful and deter too much unaccounted for splurging and unnecessary spending. To start off, create a 3-month post-holiday budget, where excess expenses outside of the necessities are low and your primary focus is to pay off your holiday debt. Later in the year, employ different tips and tricks to boost your financial wellness, whether that means visiting a financial therapist, following the 50/30/20 rule, or having money dates with your partner – whatever it takes to maintain a positive relationship with money and manage your bank account like a pro!