How to Recover from an Expensive Christmas
As much as we might like and want to save money, the holidays are a common time for people to overspend. It’s not that you don’t try, but travel expenses, presents, and unexpected expenses add up. By the time January comes around, you realize that you’ve spent way too much!
There’s always a new day and in this case, a new year to get back on track with your spending. Here are some tips on how to recover if you’ve been financially drained this holiday season.
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1 | Calculate how much you owe
Take a look at your credit card and bank statements to determine how much you’ve spent and how much you still owe if you have any outstanding debt. It might be painful to look at the numbers, but that’s the starting point to getting back on track.
Then make a plan to pay it off.
Is it realistic to pay it back in the next three months or six months, or will you need longer? Pay at least the minimum on any credit cards. Pay more if you have any extra money for it.
If you got lucky with a holiday bonus or some monetary gifts at Christmas, use that extra money to pay off debts too.
Paying off the credit cards may require cutting back in other areas of your budget, which leads to the next tip.
2 | Have a frugal month
The next thing to do is plan a frugal January.
Take a close look at your budget to get an idea of where you can cut costs.
Even if you’re pretty frugal to start, you might come away with even a few things that you can do to save money.
If you bring your lunch to work every day, but they’re premade salads or prepacked foods, could you buy those ingredients in bulk and make the salads yourself at home?
There’s doing meatless meals a few times a week or making a large batch of soup or stew that will last many meals. While the savings are a bit here and there, they add up to help you pay off the credit cards.
As for acquiring new things, try holding off on them as long as you can. Cut out any non-essential shopping and activities.
When friends or family ask you out to dinner, suggest getting together at home or in a few weeks when your finances are looking better.
Let your family and friends know of your frugal month too so that they can join in or at least support you. Chances are that they’ll want to get their new year’s spending and saving in better shape too.
Where else can you cut expenses?
Cut out impulse grocery purchases, extra snacks or drinks, and high-cost foods. Substitute with cheaper alternatives.
Cancel any unnecessary subscription services or go for cheaper alternatives.
Ask your credit card company for a lower interest rate or find one with a lower interest rate.
Turn down the thermostat to save on heating costs.
Skip dry cleaning for the month or dry clean your clothes at home.
Choose free activities like the library or free days at museums to entertain yourself and the family.
This extra frugal month is only for a few weeks, but you may like the benefits so much that you decide to have an extra frugal February too.
3 | Return or sell gifts
This might not be the most popular idea here, but it works!
Return anything you can.
Many stores have extended return periods around the holidays so a 30-day return window may be a 90-day one now. You may still be able to return goods for a full refund.
Things you purchased - Did you buy things for yourself or your family that you did not use? If you didn’t use them, then you probably don’t need them.
You might be debating if you’ll need these things next winter. You can always buy it again late next year. Return them because you need the money now.
Some things you’ll likely be able to return (as long as they’re unused):
Holiday decorations and ornaments
Kitchenware
Gifts that were misplaced, substituted, or not given
Clothes, shoes, and accessories still with tags on them
Things you received - You’ve probably experienced receiving gifts that you don’t like or won’t use. Don’t feel bad about returning gifts that people have given you. Once a gift is given, the recipient can decide what to do with it.
And I’m probably not the only one who prefers that a gift recipient return or exchange a gift from me if they’re not going to use it. They can find something better for themselves, or in this case, money.
Things around the house - It’s not only new gifts that you can sell. Sell what you have around the house that you don’t use it anymore. Most people have way too much stuff in their homes.
Sell the clothes and toys that your children have outgrown. Post for sale any sports equipment, video games, instruments, and anything else of value that you don’t mind getting rid of.
Post to Craigslist, Nextdoor, LetGo, of Facebook Marketplace to get rid of things locally. Or try eBay, Poshmark, Mercari, and other online sites for a larger audience of domestic and international buyers.
4 | Make some money
You can only save and cut back so much. So if you want to get rid of after-Christmas debt as fast as possible, the next step is to make some money.
Day job - Consider if your work lets you take on extra shifts, work overtime, cover weekends, take on extra projects, or hire more clients.
You know what’s possible for you to increase your savings. It can be a temporary fix too, so you’re not giving up all your extra time and energy to work.
Side hustles - Another way to make extra money is to take on a side hustle. Some of them can be done online and on your hours too, so you never even have to leave home.
There are so many side hustles out there that you’re bound to find one that fits your schedule and skills. These are just a few:
Virtual assistant
Teach English online
Participate in research groups
Walk and babysit dogs and cats
Recharge scooters overnight
Thrift shop and resell things online
List yourself and your skills on TaskRabbit
Do freelance writing
5 | Save year-round for next Christmas
The best way to recover from an expensive Christmas is to start preparing early for next year’s Christmas. That way you have a comfortable budget to work with next December and won’t have to worry about overspending.
If at all possible, set aside $50-$100 a month in a separate envelop or account that you won’t touch until the holiday season.
Even $20 will make a difference after several months. Your wallet and your sanity will stay intact next December.
Imagine how relieved you’ll feel knowing that Christmas is already paid for!
Check out these money-saving tactics to help you meet your goals:
52-Week Savings – Decide how much you want to save each week for the year and enter it into a spreadsheet so that you can track your progress along the way.
Penny Savings – The premise of this method is to save a penny more each day for however long you intend to save. Start of day 1 with $0.01 and end day 7 with a cumulative $0.28 for the week. Keep going for a year and you’ll have over $667 saved!
No matter how much you are in the red after the holidays, you can lessen or eliminate your debt altogether with some good financial moves like those mentioned above.
Begin the new year with a solid plan in place and a refreshed take on your budget.
