The following is a post by MPFJ staff writer, CJ, who blogs at thesingledollar.com about personal finance, budgeting, frugality, and debt repayment.
I don’t know about you, but I woke up on December 26 to a budget bursting at the seams. At Christmas 2014 I was finishing up a year of debt payoff and I was very strict about buying presents, going out to brunch, and so on. But I got a little too relaxed this year; I bought gifts for more people, went out several times with friends, and generally had a hard time saying “no” to myself.
Luckily, I have a plan for what to do next. Just like after you eat too many Christmas cookies (I may have done that too this week, not saying!), recovery and restabilization is key.
Assess the Situation
Just how bad is it? Did you go into debt, or did you just spend all your “slush” money? This isn’t the time for regrets; even if you bought too many presents for your kids, or spent $30 on a meal out that wasn’t delicious, you can’t undo it now. Just make a list of any debts you have to pay off (credit card balances, money you borrowed from relatives or friends…) and prioritize them. If you don’t have debt, heave a sigh of relief and list your upcoming expenses.
Raise Cash/Store Credit
You’ll need to find some spare cash. You may have received gift cards or cash, or you can do some quick freelance work at sites like Swagbucks, Fiverr, or Usertesting. But one of my favorite ways to get back on track is to return unwise purchases to stores. If you bought presents for yourself (guilty!), do you still have the receipt and is the item unworn/unopened? Go get that money back! If you were given gifts that you won’t use, that can also be helpful. If you can tell where it came from (for example, a sweater from a specific retailer) then you can often take it back for store credit which you can use for things you really need. It’s nice if this is Target or Walmart so you can use the store credit for groceries.
Slim Down (Your Budget)
If you overindulged at Christmas, you’ll have to spend the next month or two tightening your belt. Look for places that you can cut back. The easiest way for me to do this is to cut down on food purchases: either I don’t go out as much, or I focus on making very cheap meals at home. If your family eats a lot of meat normally, try eating more pasta, rice, and beans. Or skip going to the movies and watch DVDs you already have. There are lots of places you can cut back a little for a month or two.
Follow Through
This step is simple: take the money you recoup from steps #2 and #3, and use it for the priorities you came up with in step #1. Pay off debts in order of importance, and pay necessary bills. Cross each item off your list as you pay it, as a great motivational tactic. When everything is crossed off, you’re back on your feet.
Plan For Next Year
Once you and your bank accounts are back on your feet, make sure you don’t make the same mistake again. Open a sub-account or a new line in your budget and name it “holiday.” Then set aside a pre-determined amount every month — say, $25 or $50. When December comes again, you’ll be able to have a good time without the yearly regret-filled reckoning.
How about you all? How did you do financially over the holidays? Any good tips for pulling yourself back together?
Share your experiences by commenting below!
***Photo courtesy https://pixabay.com/en/savings-bank-christmas-savings-pig-919859/
