How to Recover from Overspending During the Holidays (Without Cutting Everything You Love)
12th January 2023
Over the holidays, overspending can be tough to avoid. Holiday travels, sweet treats with friends and gift-giving can set us back a bit more than we had expected or budgeted for. And while it’s usually absolutely worth it, holiday cheer doesn’t help pay the bills.
The most important thing you can do is try not to panic. We’re going to share some actionable tips you can use to help you recover from overspending this holiday season.
Step 1: Don’t Panic
It is easy to beat yourself up for all the holiday purchases you made, but feeling guilty won’t solve anything and could affect how much you enjoy future festivities.
Not only will letting that anxiety eat away at you delay recovery and make you feel guilty, but when we’re feeling low, we tend to impulse buy and spend even more in an attempt to feel better.
Instead, we need to look at the complete picture and take this time to make a plan to get back on track with your finances. Time machines don’t exist, so instead of focusing on things we can’t go back and change, we need to focus on the things we can do now.
Step 2: Stop Spending Money!
One of the best ways to get your finances back on track is to create a realistic budget and reduce future spending. You need to save as much money as possible.
The first step is to cut out unnecessary spending and extra expenses. This means no more impulse purchases and regular takeaways. Cancel your unused subscriptions, stock your kitchen with ingredients and start making your coffee at home.
Self-control is a battle we all struggle with, but all these seemingly tiny transactions add up quickly. One everyday way to spend less money would be buying groceries and cooking meals at home.
If necessary, you could even take this one step further and start couponing. It's actually very simple and often overlooked.
All you have to do is:
1. Browse the ads for your local grocery store or supermarket
2. Find the best deals and coupons for necessities
3. Plan your meals based on those sales.
It is, however, crucial to stick to your grocery list to stay within budget. This way you can stop spending money on unnecessary items. We’ve all gone to the grocery store a bit peckish and left with more snacks than we actually wanted. Never shop while hungry - you will be much more likely to spend money on snacks.
Step 3: Manage Credit Card Debt
Now is the time to assess the damage. If you’ve spent a bit too much on your credit cards, your high usage could be lowering your credit score, so it’s worth getting on top of it as soon as you can. Thankfully, with a couple of tips and tricks, you can begin rebuilding your credit score.
If you can afford it, pay more than the minimum payments on your credit cards to bring down your credit card balance faster. This can help you avoid that credit card debt from getting ahead of you. Try to reach the smallest balance possible. You will be able to take charge before the interest rates become an even bigger issue.
Step 4: Check Your Savings
If you happen to have a savings account lying around, then this may ease some of the financial burdens you’ve stumbled into this past holiday. You could borrow money from your savings to lower your debt and rebuild what you saved again. It’s never ideal to have to tap into your rainy-day funds, but that’s what they are there for. Your credit interest rates will almost always outweigh your savings interest, so it’s more cost effective to do this.
If you don’t have any savings, these holiday purchases are a wake-up call to start planning for your financial future (and next year’s holiday season). Putting away a little money every month will add up quicker than you thought. This can help you meet your financial goals and get you the wiggle room you need.
Step 5: Consider Debt Consolidation
When you find yourself in debt with multiple accounts, it might be time to look into debt consolidation. Debt consolidation allows you to take your balances from all your accounts and combine them. You will need to check the interest rates, the length of the payment term and the total amount repayable to ensure this is the right thing for you to do. But if you do decide to consolidate your debt then you may only have to worry about paying one smaller monthly payment.
Many loan providers offer a short-term plan that can be paid back in as little as 12 months and plans that extend as long as 36 months.
Holiday spending is almost always unavoidable. We buy holiday gifts for those we love (including ourselves), add impulse buys to our carts, and spend way more than we plan.
But guess what? Our impulse buys and unnecessary spending do not define us, and we can - and will - bounce back.
There are truly plenty of options to help you recuperate from overspending, however it happened. You can budget, learn to manage your credit cards, or even consolidate your debt into one easy and manageable payment. Whichever route you choose, do not let it control your life.