By: K.H. Smith
Well, your best laid plans of staying in budget for the holidays failed. Now it is January and your credit card statement is here! Ouch! Kinda feels like a hangover, doesn’t it? A financial hangover! Now what? How do you recover from the damage done in December and start this new year off right? Well first things first…put a hold on any shopping, eating out, and unnecessary spending. Not sure if it’s absolutely necessary, then it probably isn’t!
Now assess the damage. How much do you owe? Don’t beat yourself up, just move forward. Hopefully it is not as bad as you thought, but either way it’s time to make a plan. In order to pay off this debt you need extra money, either through earning more or spending less. Here are some suggestions on how to do both.
How can you make a few extra dollars this month? Do you have items you could sell? Could you pick up a part time job? Even just babysit, house sit, or walk a dog? Can you work overtime at your current job? Could you do surveys or usability testing online (Check out this bloggers list of good sites to use)? Can you cash in credit card rewards points? What about using Ibotta App or Checkout 51 App earnings?
Did you receive gift cards over the holidays that you could use to trim your expenses, maybe restaurant gift cards that could trim your grocery bill? (only if the amount of the card would fully pay the tab!) Are there items you purchased for yourself or family that you can return? Maybe a few impulse buys that you could do without?
Try to cut your grocery budget and entertainment budget as much as possible to help you pay down your bills. To cut your grocery budget try to use coupons, eat at home, and maybe eat out of your pantry and freezer more. Yes, it will deplete your food stash, but that is what it is for. You can build it up again as you have the funds later. For entertainment, think free activities! Here are some great winter activities for you and the family that don’t cost a dime. You can also take advantage of any entertainment gift cards as long as they cover the full cost.
Now with the extra cash you have earned and the money saved by cutting expenses, put as much as you can towards the credit card. Hopefully by doing this for a month or two you can recover from this spending splurge.
Most importantly, you need to assess what went wrong. Why did you overspend? Did you forget people on your list? Did you go to too many happy hours? Did you just get caught up in holiday sales and buy things? Knowing where you went wrong will help you plan better for next year. Once you get yourself back out of this financial hole, start saving for next year. Putting $50 per paycheck or per month aside for the holidays really helps, especially when you start early in the year. I tend to save my Ibotta earnings from grocery shopping to use on holiday shopping. Last year alone I was able to cash out $200 into gift cards. They have a decent variety of retailers to choose from! If you want to join Ibotta, click here to join my team and we can help each other get increased rewards.
Now you have a plan to recover from this overspending, and hopefully some insight to prevent a financial hangover from happening again this year. Take some time as well to think about your personal financial situation and goals. Maybe it’s time to get a handle on your financial future. Check out my posts on budgeting and making financial goals for the year.
How have you recovered from your financial hangover?