The December holidays may be the time of joy and giving, but that doesn’t keep January from coming around and now you’re dizzy with a holiday spending hangover. Getting back on financial track will take some effort but doesn’t have to be difficult. Comparing your auto policies with others and finding cheap car insurance is an easy place to start, then creating a sustainable budget and considering balance transfers will help get you back on course.
Why & Where that Money Goes
On average, American shoppers spend nearly $1,000 toward the holiday season with food, gifts, and decorations. Nearly 70% of that goes to gifts. It’s easy to overspend at the holidays. Most people feel an enormous amount of pressure to get ‘just the right gift’ – so not only does this mean you have to find something creative and thoughtful but it also has to be within your spending budget. Usually, one of those elements goes to the wayside and it’s usually the financial aspect.
Difficult Getting Back on Track
Mindset is everything, and once the holidays are over and you’re faced with January and a new year, the festive lights are taken down and everyone’s energy is sluggish, it can be exceedingly difficult to get yourself on a good financial track.
- Review your credit card statements regularly, throughout the holiday season so you won’t have any surprises jump out at you come January.
- Completely understand the terms of your card – interest rates, APR, and whether the rates are variable or fixed so you will have thorough understanding of what you owe, and how that (seemingly gigantic) number came into existence.
- If you haven’t taken a look beforehand and you do find yourself in shock, allow yourself to take a step back to process the information. It’s okay to absorb it and let it settle in, with the idea that you will take action next week.
Create a Sustainable Budget
A sustainable budget is one that stays viable and lets you work on paying off the holiday debt comfortably, without feeling so financially constrained that you throw your hands up in the air and throw the budget out the window.
If you want to speed up the process of paying off holiday debt, you can think about:
- Finding room in the budget so you can pay more than the monthly minimum payment on your credit cards
- Consider a balance transfer offer that comes with a zero-interest promotion period. This might serve you well if you know that it will take many months to pay off the balance. Once you transfer card balances to a zero-interest account, you’ve knocked out that significant amount of money that would be paid toward interest.
- Department store credit cards often have higher interest rates because they offer many coupons, discounts and promotions during the holiday period, so these are the ones to either pay off first or satisfy with a balance transfer.
- Finding an unsecured personal loan to pay off your credit cards could work in your favor if you are able to find personal loan interest rates that are lower.
- Give your credit card company a call and see if you’re able to get the interest rate lowered. If you’re a customer in good standing, they might be able to lower it by a couple of points, which in the end will save you money.
Take a Pause in January
If you spent a lot of money throughout the holiday season, let January be a month of credit card pause. If you have to, put them physically out of sight so you won’t feel tempted to use them. Take the numbers out of your computer so they don’t automatically populate at internet checkouts. You don’t want to do more damage than has already been done and when you take a pause, you’ll feel better about making financial headway in the months to come.
Use Tools and Apps to Your Advantage
There are a ton of money management tools and apps out there that will help you keep track of spending, automate bills, and help you stay on budget. Once you feel you have your holiday spending behind you and you’re shaking off the hangover, you’ll want to start creating fresh goals for 2023. Some of the apps to consider include: Notion, YNAB, and Mint for accomplishing these goals.
With the holiday season behind us, you’re ready to move forward productively with smart financial goals and a clean slate. Take action now so you can pay off your holiday debt and start planning for 2023.