Why do we overspend in the first place? Many of us go shopping with the intention of buying for family and friends, but we also splurge on ourselves too. Taking advantage of Amazon Prime deals and Black Friday specials may feel good at the time, but the reality of a spending spree hits a little later when the statement arrives.
If you’re feeling that holiday spending hangover, here are five good tips to feel better, financially shape up and dig out of that holiday debt.
1. Press the pause button
Now that you’ve stopped adding to the amount you owe, press the pause button on your spending. Stop using credit cards, only purchase what may be an absolute necessity, and rely on cash while you are starting to work your way out of the holiday spending hole.
2. Plan to pay it off
Get over the shock, take stock of what you’ve spent, and get organized. It might help to create a spreadsheet for tracking the outstanding debt. You’ll need to assess what interest or fees may accrue on the debt and which cards are the first priority to pay off. Establish a plan to get it paid off as soon as possible.
3. Free up funds
The quicker you get out of debt, the sooner you’ll get ahead. So, if you have to make sacrifices in the short term to make faster progress, go for it. Cut out anything unnecessary and aim to pay as much as possible of your balance each month. A credit card balance transfer at zero percent may be another option to help pay the debt while avoiding paying that super-high interest.
4. Earn extra cash
To pay your debt down quicker, get creative with ways to bring in more cash. See if your employer will pay you out for remaining vacation days. Temporarily rent out your car on Turo or Getaround. Get a side gig, whether it’s neighborhood jobs on Nextdoor or pet sitting. Or, gather the items around the house you no longer need and sell them on Offerup or eBay.
5. Plan now for next year!
So that you don’t repeat the same spending situation during the 2022 holiday season, start planning now for the cash you might need. After your holiday debt is paid, aim to save some money each month so that when the next holiday season arrives, you’ll be ready to spend guilt-free and you won’t need to go into credit card debt.
The holidays truly can be overwhelming. Going into debt just adds to the stress of the season. But don’t beat yourself up, just plan to get back on track.
If you would like to have your current financial plan reviewed, or if you are looking for a new financial plan, schedule an appointment on Bayntree’s online calendar by selecting the date and time that is most convenient for you! You can also always reach us by emailing email@example.com.
Bayntree Wealth Advisors provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.