The holiday season has come and gone, and I’m sure we all exhaled a collective sigh of relief. Holidays can be festive and thrilling, but the planning, preparations, and the extra expenses they come with can build up stress.
With the dawn of a new year, it’s time to peek under the carpet and tally up your holiday spending. Did you exceed your budget with those last-minute, unforeseen costs? No problem. Follow these six steps to recuperate gracefully from your spending spree and get back in line with your financial objectives.
1. SELF-FORGIVENESS
Acknowledge and forgive yourself for overshooting your budget. There’s no point in dwelling on guilt or regret. This happens to many, but it’s far from a catastrophe. The quicker you switch from self-reproach to strategizing your comeback, the faster you’ll restore your financial health.
2. HALT SPENDING AND EVALUATE THE AFTERMATH
You need to stop additional spending and recap your expenditure over the past weeks to understand your financial position better. There’s nothing fretful like charging your debit card without considering if you can afford the purchase.
Avoid this by closely examining the aftermath of your expenses. You may also want to consider a spending freeze while outlining a recovery plan. Refrain from unnecessary spending completely and keep your credit cards out of sight. Opt for a cash-based budget comprising essential expenses like fuel, utilities, and your housing payments, possibly using the envelope system.
3. REVISIT YOUR PURCHASES
Review your purchases to determine if you can return items or sell them if you’re having doubts. Many retailers allow returns within a specific period with the original receipt, potentially offering store credit or a gift card which can be useful for your regular purchases. If this isn’t applicable, you might consider selling the item online or on marketplaces like Facebook to reclaim your money.
4. TRIM YOUR EXPENSES
By freezing your spending, you’ll significantly cut your purchases and cultivate better financial habits. Concentrate on devising a practical budget, preparing and eating home-cooked meals, avoiding impromptu purchases, terminating unnecessary subscriptions, and seeking affordable entertainment. Consider renegotiating your insurance rates and examine your budget thoroughly to determine which costs you can reduce or eliminate.
5. BOOST YOUR INCOME
After a spending surge, earning extra money can significantly uplift your spirits and finances. In major financial snags, supplementary income is essential to turn things around.
Look for opportunities to increase your income, like working extra hours, expanding your side job, finding a temporary job, or offering freelance services online. Other online opportunities can include website testing, surveys, tutoring, or selling items from your home – every little counts!
6. CREATE A SAFETY NET
Last but not least, it’s essential to prevent future spending sprees by establishing a checking account buffer – extra funds to cushion any budget overshoots. Aim to have at least a week’s pay waiting in your checking account at all times. Double it if you have unstable income. If you accidentally dip into it, make sure to replenish it regularly.
Have you ever gone on a spending spree and how did you recover?
