Volume 3 Issue 1
Getting Back to Normal Spending after the Holidays
By Lourdes Cortez
Getting finances back on track after the holidays can prove to be difficult for many individuals. It is common practice to open new credit cards during the holidays to get special deals and discounts or use them to rack up points or miles. According to the 2015 Parents, Kids & Money Survey, some 62% of parents admit to spending more than they should over the holidays.
It is important to note, that many steps can be taken in order to ensure getting back on track with expenditures for the coming year. In January, writing down projected expenses and setting aside cash for these can be advantageous. Most expenses for the holidays are on a credit card, the use of cash or a debit card when making new payments can stop debt from accruing.
Knowing and understanding what you spent your money on during the holidays can be crucial. By keeping receipts, you can track how much money you need to repay at the end of the holidays. This tactic can make creating a repayment plan effortless, and allow you to set a payoff deadline.
It is important to prioritize your repayment by paying off the debt with the highest interest rates first.
After December there are a plethora of post-holiday sales and discounts. Be sure not to fall victim to making frivolous purchases immediately following the holidays. Your focus should be on eliminating your current debt, not adding additional debt.
Spending on extracurricular activities such as eating out, entertainment and other nonessentials needs to be reevaluated after holiday spending. After reviewing your budget, be sure to determine a reasonable amount to spend on incidentals each month.
Another helpful tip is to look for ways to earn additional revenue. You can sort through clothes that can be sold at consignment stores or flea markets. In addition, you can return or re-sell holiday gifts that you do not need, or clean your home and get rid of appliances, equipment, clothes and/or toys. Using online websites to sell these items is easy and you can immediately use these funds to pay back holiday debt.
In fact, spending and budgeting during the holidays is the perfect opportunity to teach your children about finances. By giving your children an
allowance on holiday spending, they can learn how to budget what they buy and ensure not to overspend.
No matter what repayment tactic you use, always be sure to pay your bills in a timely fashion. Be sure to keep your credit cards out of your wallet to lessen any temptation to use them.
The biggest task at hand is to finish paying of your debt as soon as possible. Once you have paid back all holiday debt, be sure to begin planning for the next holiday season. Setting aside $10 to $20 a week towards holiday spending can create a spending safety net, decreasing the need to use credit cards. If you pace yourself by buying gifts throughout the year, you will feel less stressed and your finances will not be affected. Additionally, there are many sales throughout the year such as semi-annual sales and anniversary sales that offer many items at extremely discounted prices. Remember, it is never too early to begin your holiday shopping!
Keep in mind, as soon as the year begins you can create a list; keep a spending log; open a holiday spending account; and take advantage of store offers and coupons as early as possible. By planning in advance and being committed to your approach, you can ensure to avoid holiday financial debt and frustrations. Getting back to normal spending can be seamless if you begin the holiday spending process as soon as possible and set realistic goals.