Are your pockets feeling a little lighter in the new year after the holiday spending spree? With subdued new year celebrations following close on the heels of Thanksgiving and Christmas, most of us are starting out the new year with at least a little tinge of financial anxiety. Or maybe a lot of anxiety, given the global COVID-19 pandemic.
According to the National Retail Federation, Americans planned to spend $998 on average for gifts, food, decorations and other holiday-related purchases in 2020.
Right. So now you must devise a plan to financially recover from holiday overspending. Here are a few pointers to send you down the road to financial stability:
- Skimp on unnecessary luxuries: Wait to buy that dress you’ve been eyeing; cook meals at home; make your coffee instead of hitting up Starbucks. Draw a line between what you want and what you need.
- Access your holiday swag: Forget the obligation to keep every gift you get. If you’d rather get cashback or store credit, do so. Look into return policies and use those gift receipts.
- Hire a financial advisor: An advisor can look at how you are spending your money to see what opportunities are there and can build a customized plan for you.
- Search for part-time jobs: Cruise craigslist for openings, post your résumé on job sites, drive your car on Lyft or reach out to family and friends. Even working a few extra hours each week will help pay off those outstanding bills.
- Get an interest-free credit card: High-interest rates can be brutal, especially if your pre-holiday balance already was high. Plus, store credit cards have notoriously high-interest rates. Considering transferring outstanding balances to a new credit card that offers an introductory 0% interest rate.
- File your taxes: If you normally receive a chunky tax return, file your taxes now to get that return quicker and help cover lingering holiday costs.
- Prepare next year’s holiday budget: Calculate what you spent this year on holiday spending and divide that number into manageable monthly amounts. Each month spend that amount, and only that amount, on next year’s holiday gifts. Another option is to start buying gifts one at a time in the fall. Then, by the time December rolls around, you’ll be done.