collaborative post // The holidays are an important time of year for many of us. We spend more quality time with friends and family having fun, and in order to share, we usually purchase thoughtful gifts for our nearest and dearest too.
There’s nothing wrong with showing your love with a gift or two, but many of us will end up going way overboard when it comes to shopping in the holiday season, and this can put a significant strain on our finances.
If you’ve had a bit of spend-heavy holiday season, and your finances are in a funk, here are a few things you can do to help you get back on track post-holiday shopping.
Review your finances
The first thing you will want to do after a holiday shopping splurge, is to sit down and review your finances. Make a note of every single dime you spent on the holidays from food to gifts, and then make a note of your savings, debts, and any cash in your account.
This will give you a good idea of where you are starting from and what you will need to do to get back on an even financial keel. You can then draw up a detailed budget that will help you pay down your debts and get back to where you should be money-wise.
Work on diminishing your debts
It is not unusual for people to get into debt with their holiday spending, although it is fair to say that it is a tad unwise to do so. If you are one such person who has used your credit card or loans to pay for your holiday shopping, then you need to make paying down your debts a priority.
Start by listing every credit card or loan that has a debt balance, and then list how much interest each is charging. This will give you a good idea of which debts to tackle first. Obviously, you will need to pay the minimum amount off the balance of each debt every month, but if you have anything left over, you can start making additional payments to the highest interests debt.
Why? Because it will be costing you the most money, so the sooner you pay it down, the sooner you can start paying the next biggest debt and so on, without having to pay more than necessary in interest costs.
Speaking of interest costs, it may be possible to lower them or do away with them completely if you can find a credit card that is offering 0% interest and transfer any of your holiday debt balances to that. If you pay off the full amount in the debt-free periods, you will only be paying back what you have spent, and not a penny of extra in interest.
Find some extra money
If you are serious about getting back on track after running up holiday debts, then it might be worth looking at any sources of extra money you can lay your hands on such as your holiday bonus from work, or picking up a few extra shifts during the New Year boom.
You might even think about freelancing and using a particular skill you have to help you pay more money off your debts more quickly so that you can build back your savings, increase your credit score, and therefore chances of getting a mortgage, even a bad credit mortgage, and car loan, and ensure that being in debt just generally does not hold you back from doing whatever it is you want or need to do in the coming year, financially speaking.
Start making automated payments
If you have gotten yourself into a bit of debt over the holiday season, you might have a lot of credit card and loan repayments to make in the New Year. In that is the case, you should really set up automated payment plans for them all because it is so easy to miss one out and forget to make the minimum payment one month, which can ruin your credit score and add late fees to your already existing debts.
Automated payments ensure that you never miss a payment, which makes managing your post-holiday debts a whole lot easier than they might other be. In fact, automating all of your payments, including household bills, is pretty smart if you want to take control of your finances in general.
Talk to creditors
If you have gotten into holiday debt way above your head then it could be a good idea to reach out to your creditors and let them know what has happened.
A lot of people do not realize that you can talk to creditors about your financial situation and that many of them will actually be much more sympathetic than you might have imagined,
If you are struggling to pay back debts at the current rate, they may be persuaded to freeze interests or lower your monthly payments to make things more manageable for you until you get back on your feet again, and this can be so useful when you are struggling and want to get your finances back on track.
Talk to someone
If you are struggling with debts over the holiday season, it is also a good idea to talk to someone you trust. Being in debt can feel like a millstone around your neck; it can feel like you are drowning and that you have nowhere to turn, but you really do.
Most people will be happy to talk to you and help you through it if you let them know how you are feeling, so don’t be afraid to confide in a good friend or family member about your predicaments, so you can get some support with the mental health side of being in debt.
You should also think about talking to a qualified debt counselor who will be able to support you, talk to creditors on your behalf, and help you to draw up a repayment plan that works for you and takes the pressure off a little, or maybe even a lot.
Debt counselors can also help you to come up with a regular budget that will help to prevent you from getting into financial trouble in the future too, so if you can be courageous enough to get in touch with one, it really will improve your financial life for the better.
Start saving for next year
Once you have started to get this yeast’s post-holiday finances under control, it is worth setting up a savings account that you can use to deposit money in each month with a view to saving enough that you don’t have to get into debt next holiday season.
So many people get into a pattern of using credit to pay for their holiday gifts, spending the rest of the year paying it off again, only to get into debt again to pay for the next round of holiday spending. This is far from an ideal situation to be in, so if you can put aside anything extra for the holidays through the year you should do so; break the cycles, never have to worry about holiday debt again, and you will absolutely enjoy the season more than you ever have done.
Learn the meaning of the holidays
If you want to avoid getting into debt for the holidays in the future, then another thing you should do is think about the real meaning of the holidays. Yes, gifts are nice, but the true spirit of the holidays is spending quality time with your loved ones, playing games, talking, doing fun activities, and sharing your love.
Sure, there is no reason why you should not still exchange gifts if you want to, but there really is no reason to go overboard and get into debt doing so. The simple things in life are often the best and as long as your family and friends know how much you love them and how happy you are to be spending time with them, they don’t need expensive jewelry, fancy perfume, or the latest games console to show them how you feel.
In fact, you could make a pact with adult family and friends that you only exchange small token gifts, run a secret Santa so you only have to buy one gift each, or even that you will each just contribute to a nice meal instead of buying gifts – all of these things will still show that you care while also invoking the true spirit of the holidays, and not getting you in debt as you do do
What’s done is done: if you have spent too much money on holiday shopping, you can’t take it back, but what you can do is try your best to get your finances back on track and the above steps will definitely help you to do that. It might not always be easy, but if you have a plan and the right attitude, you can do it. So, what are you waiting for?