Have you overspent at Christmas? Don’t beat yourself up about it—it’s the holidays, after all. Here’s how to get your finances back on track after the festive season.
The parties came and went. You spent too much on food, presents, or perhaps a holiday trip. Chances are, your bank balance is not looking good after the year-end celebrations. The good news is that you don’t need to panic if you’ve found yourself spending more than usual during the festivities.
If you’re looking for ways on how you’ll get your finances back on track after you’ve had a holiday blowout, these best practices can help you in no time.
Work Out What You Have Spent
First, channel your energy into figuring out how much you spent over the holidays and where you went over budget. Christmas is a time of festive decorations, lots of gifts, over-indulgence, and parties. It’s easy to splurge and forget about your budget during the celebration.
Write down all the costs you forgot to factor into a budget or all the purchases you made when you forgot about the budget itself. A cool new gadget you purchases, shipping fees on all those gifts, extended gift warranties, gift wrapping—they all add up.
You can then set yourself a realistic goal of spending less next time around. Learn from your budget mistakes, no need to sit and stew on them.
Make A Plan To Pay Off Your Debt
Know exactly how much you owe. Create a list that shows each debt and the corresponding repayments that need to be met. The list can include your rent, unpaid bills, loan repayments, credit cards, fines, etc. Anything that you need to pay on a regular basis. These are your expenses.
Sum up all your debts to come up with a monthly total. The number might come as a shock at first, but knowing your total expenses is a crucial step in taking charge of your finances, which is always a good thing.
Following that step is to list your income or the money that comes in every month, this is often made up of your salary or benefits. Now you can compare your income to your expenses and work on a plan to pay off your debt. So long as your income is greater than your expenses, you can allocate some (or all) of that to paying off debts.
Decide which are your priority debts and try to pay them first. For assistance, The National Debt Helpline has a guide that can help you to prioritise your debts.
After you’ve wiped off all your debts, fingers crossed, it’s a lot easier to create a budget for next Christmas.
Have A Strict Budget In Place For Next Christmas
If your spending has burst out of control last Christmas, you better be prepared and vow to do better for the next holiday. You have to come up with a stricter budget.
Budgeting is undeniably one of the best practices for managing spending. A budget helps you save money and better utilise the money you have. Decide how much you intend to spend on the upcoming Christmas, and divide that number by 52. You now have the amount you will have to put away each week to afford that Christmas budget.
If that number is higher than you would like, there are ways to save money at Christmas. You can suggest doing a Secret Santa instead of buying gifts for every individual member of your family. Or you can set a spend limit as a group, with no gift allowed to cost more than the limit. Or perhaps the adults could agree to buy gifts for kids only. You might also want to try the best apps to save money on shopping.
Start Planning Now
The best time to start planning a budget is now. You should already have your regular budget based on your income and expenses, but there are plenty more expenses to factor in throughout those end-of-year weeks. Consider:
- Charity donations
- Any other holiday expenses
Factor in all those expenses to make a reliable Christmas budget. Compute how much funds you need to set aside regularly to meet your spending surge in December. With a ballpark of how much this festive season could cost you, it’s time to develop a plan to reach your savings goals. Try running a test, putting aside the amount required to meet your goals, for two months. Is it manageable? Are those goals realistic? Could you be saving even more?
If you can’t reach those goals in your test run, you probably won’t reach them for the rest of the year either. You may need to re-budget your holiday spending into something more attainable and realistic.
To help monitor your Christmas savings, consider adding a separate savings account (so long as your bank doesn’t charge you it). Set up automatic transfers from your main account into your Christmas savings account to lessen the hassle of moving money around.
Earn Some Extra Money
In some cases, it’s not enough to reduce your spending after the holidays. You may also need to increase your income as well.
Make some extra cash through side hustles. They not only help fill your bank account, but they can also be a gateway for transitioning into your own business, develop new skills, and create a network to help with your career.
Freelancing is very popular for most people since it’s straightforward when you already possess skills or talent. It’s also flexible, often done online while earning decent money. Not to mention, you can always turn this into a full-time gig.
Do you have charisma in front of the camera? Have you considered starting your own YouTube channel? There are lots of fan bases you can tap into when you find your niche. Love knitting? Create a knitting tutorial channel with a unique approach. Obsessed with gaming? Look for a new angle and think about what kind of videos to show.
If you liked our “Getting Your Finances Back On Track After The Festive Season” and took away something useful, check our blog space regularly to learn more on basic budgeting, how to manage your debts, or, to be more specific, how you can pay down your holiday debt.