Get your budget back on track with these 5 simple tips.
‘Tis the season to overspend. Whether you were caught off-guard by some unplanned gifts, extra shopping, or any other of the countless ways in which the season lifts money from our back pockets...know that there’s only one way to go when you’re broke at the bottom. And that’s up.
Coming out of the other side of the holidays knowing that you need to turn your finances around is step one toward getting things back on track. Here are a few more tips to right the ship and—hopefully—plan better next year.
1. Find Out Where Your Money Went
Ostensibly, when the holidays roll around, you spend your money on gifts. But that’s just one outlet for the season’s contagious generosity. Maybe you ate out more than normal to see friends and family who are in town; maybe bought a few more rounds of drinks or, upon seeing a deal too good to pass up, bought something for yourself. Regardless of how the money was spent, now’s the time to figure out where it went. Gifts, dinners, drinks, and whatever else popped up as an extra expense. Use this information to craft a budget for next year, and try to sock away a little bit of money every month coming up to December to lessen the impact.
2. Check Credit Cards
According to a recent report, almost 80% of Americans are financing the extra holiday spending through credit cards. If you’re one of these people, make a plan to pay off the cards ASAP. Accruing interest fees can turn a few $20 gifts into a much bigger sum of money over time. If the sums of money are too big to pay off quickly, look into transferring the balance to a zero percent card, or maybe even a short-term loan with low interest rates.
3. Shop Smarter
If you’re broke at the end of the holiday season, chances are you might be a bit of an impulse buyer. Start becoming a smarter shopper by using modern convenience to shop online more. Use Amazon Subscribe & Save or other subscription services to stop you from buying things in store you don’t need. Take advantage of delivery grocery services as well; the fee you pay for delivery or pick-up will probably be less than what you spend on impulse buys while walking the aisles.
4. Do You Overspend?
Financial guru Dave Ramsey said, “We buy things we don't need with money we don't have to impress people we don't like.” This doesn’t apply to everyone, but it does appeal to the emotional and psychological reasons for why we overspend. Next time you feel the urge to buy something a little extravagant, or just something you don’t need, stop and take a moment. Ask yourself why you’re drawn to this thing, and why do you need to buy it? You might find out that you’re acting from a habit that can be disrupted, that you get an emotional high from spending money, or maybe you just forgot that you already have the same thing or something similar.
5. Start Saving
And not just for the next year’s holidays either. Nearly everyone will encounter a crisis at some point that requires big money...replacing a furnace in winter, buying a new car, and more could come up at any moment. Not having even a small financial safety net could be devastating. There are plenty of different methods out there for those who need to develop a mindset to start saving, including auto deposits, untouchable accounts, and more.
Being broke is no fun. And while spending is a hard habit to break, it’s worth the effort. Some financial experts say that being broke after the holidays is a ‘microcosm of things to come,’ and these kinds of spending habits indicate a broke populace in retirement. It feels a little ghost of Christmas future (a la “A Christmas Carol”), but it just goes to show that you can still turn things around.
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