Wednesday, July 24

4 Steps to Revive Your Finances After Blowing Up Your Holiday Budget

How Do You Recover from The Almighty Holiday Spending?

Let’s be honest: there’s something about the holidays that just makes us want to overdo it. Whether it’s cookie binges, excess glasses of eggnog, or simply those tiring shopping marathons in search of the perfect gift, we’re definitely overdoing it.

However, what really happens in my case, for example, is that I overdo things even before the festivities start. For instance, when you realize that December has barely begun and all the smart spending plans you want to stick to are already out the window.

So if this resonates with you, don’t feel alone. Many of us had a hard time resisting the siren song of a sales app or the quality presents the ones we loved asked for. In fact, according to a 2015 survey, almost half of Americans declared they felt pressure to shell out more than they could afford during the holidays.

Moreover, it seems that for parents, things are even tougher. As it turns out, 62% of moms and dads declared they would spend more on their kids than they should have over the holidays. So if you’re angry with yourself for basically blowing up your budget too soon, the holiday overspending is not completely your fault.

Science and the retail industry are, in fact, conspiring against you. Why? Well, it’s quite simple: shopping sends a shot of the feel-good chemical dopamine to the brain, which is the same chemical that floods your brain when you bite into a piece of chocolate cake.

Stores also work hard to induce that sense of pleasure, too, with extremely friendly salespeople, festive music, and holiday scents wafting through the aisles. Psychology can easily play a role, too.

Most of us spend excess money because we’re really trying to have the perfect holiday. Whatever the reason, if you can’t enjoy the holidays because you’re way too worried about your finances, you need to read this article.

Budget bill holiday
Photo by Prostock-studio at Shutterstock

Step 1: Face the damage

Staring down at your exhausted budget might hurt, but it will also help you in a couple of ways. First, it will offer you the opportunity to take responsibility for the damage and get a handle on why you went way too far, so you can avoid the same mistakes.

For instance, did you rely on retail therapy to feel better after a bad workday? Or, were you trying to buy your way into someone’s heart? Sometimes, we overspend to fill authentic emotional needs, but shopping isn’t exactly the way to do it successfully.

Once you know what funds you have left, you could simply start figuring out how to maximize them and salvage the season. Also, you might want to calculate how much you’ve actually spent. Sometimes, even that Santa hat for your little furry friend counts. If you’re feeling depressed by the figures, there’s a bright side to it. It’s a bit far-fetched, but it stands. While you might have dried out your budget, imagine that others didn’t even start.

Step 2: Determine what you still need to get.

You know just how much you’ve already burned through, so this also means that you can correctly assess what expenses you still have coming. This also includes gifts you might have to buy, but also funds you could need for travel and entertainment plans.

Once you’ve mapped everything out, brainstorm all the right ways in which you can cover what remains without having to spend too much. Instead of buying brand-new clothes for a holiday event, you might want to commit to shopping your closet.

If you’re stuck with hosting a party, just make it a potluck or cocktail-only kind of party. As for gift-giving, you might want to rely on some mental tricks to keep you from opening your wallet too wide. Show up at the mall with a full list, and try not to stay too long.

People might tend to go into a zone after 90 minutes or so, and you become more prone to buying stuff you don’t even need. If you want to stick with online shopping, avoid setting up your account for one-click shopping.

Instead, put a 24-hour hold on anything in your cart. This way, when you see a great deal or even stumble on a new site, you will obviously get a brain rush. But the second time you go, it won’t be as juicy.

The more rational part of your brain will kick in after 24 hours. Besides, if you think you’re truly out of cash, don’t go back to the stores. I know it might sound simplistic, but it definitely works. You won’t even see the adorable wrapping paper that would complete your holiday ensemble. You will be able to make do with what you have on hand.

Step 3: Get a grip on gifts.

Here’s another upside to blowing your budget during the holidays: you could easily take advantage of looser exchange and return policies this time of the year. You might even consider exchanging some items you’ve already paid for with something that costs less.

This could also be the right time to cash in your credit card rewards points for a purchase. Or, alternatively, even try a gift card swap site like CardPool or Raise. There, you get gift cards at great discounts, and you can use them to buy what you need.

You might also want to swap that random home-store card you never really used for something a bit more practical. If your budget is getting close to zero, then it’s time to get really creative. Instead of a physical present, just go for the experiences, like cooking lessons or how to make your own bakery-worthy pastries.

You can think of it as establishing new traditions. If your group of friends always hits up a fancy restaurant or concert to celebrate this season, you might want to make new suggestions. Who knows? They might take you up on that and start something new.

budgeting holiday
Photo by fizkes from shutterstock.com

Step 4: vow to make next year better.

Well, the first thing is to promise ourselves that we’ll do better next year. That’s a fact. However, you don’t have to wait one whole year to try again. After all, there’s also spring break, birthdays, graduation/wedding season, and more.

Those times are also luring when it comes to whipping out your debit or credit card and getting back in the same hole. If you want to avoid this next time, just think about the long-term consequences of keeping up with overspending.

Is it really worth all that credit card debt? Then, you might want to consider setting up a non-monthly savings account, which is a special fund used only to cover your expenses that might leave a stain on your budget, so to speak.

You will need to figure out how much you usually spend on the whole holiday ordeal, then break that down into manageable monthly amounts you could set aside each month for that account. The whole idea is to have enough so that when November 2024 comes, your holiday is already paid for. You might need a notebook to prepare for all that, and here’s our recommendation.

Also, you could always try re-evaluating your budgeting skills. For instance, are you sure you have an accurate idea of how much you want to spend? Refresh your skills by checking out our website!

Next, you might want to try this article: 7 Efficient Tips to Recover From Bankruptcy

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