How to Beat the Post-Holiday Financial BluesBy Caitlin in Debt
After all the festivities of the holidays are done and life returns to normal it can be extremely difficult to face the realities of your current financial situation. Overcoming post-holiday debt is on the top of most people’s New Year’s resolution list but more often than not the post-holiday blues get in the way. The start of a new year is worst time of the year for many people, too much work to be done, weight to be lost, life to straighten out and money to be saved. So with an endless amount of life choices to be made and issues to deal with how do you even begin to think about saving money and tackling debt?
You face it head on, don’t ignore your account balance and let your credit card statements be the inspiration you need to work hard and beat those post-holiday financial blues.
Take an Inventory of all Your Personal Finances
First things first, you need to know what you are dealing with. Don’t continue to be in the dark about your financial situation, gather all your statements and start planning.
- Figure out what the problem is (if you think there is one); you need to know what to work on if you want to improve your finances. Start with your holiday spending, what did you spend on? Where could you have cut back? How much debt did you accumulate? If shopping and overspending is your main problem then your holiday credit card bills will definitely be the proof you need.
- Stop buying things, stop spending unnecessarily and stop adding more debt on top of the debt you already have. Stay home and don’t temp yourself, the post-holiday sales are full of great deals but shopping will only add to your problems. Accumulating more debt means you’ll be paying more interest and it will take you even longer to become debt free. Only buy things with the money you actually have and leave your credit cards at home.
- Now make a budget. Create a list of all your financial obligations, these are things you need to pay for or buy like food, rent and insurance. Now figure out how much money you have left over after you paid for all them. This is the money you need to use to start paying off your debts with and using to start an emergency fund or savings account with.
Be Tough and Figure out What Can be Cut
It’s time to be tough and honest with yourself. You need to decide what spending is essential to your life and what spending needs to be cut. Learn the difference between needs and wants and change your spending habits accordingly. Let your holiday credit card bills be the inspiration you need. Learn to create a shopping list and a spending plan; don’t make unplanned or spontaneous purchases.
If you’re having trouble deciding what’s essential and what is non-essential, here are some examples of things you can probably cut from your budget.
- Unnecessary gas and parking fees. Take public transportation or walk when possible.
- Stop taking cash advances from your credit cards, the interest is astronomical.
- Cancel your cable or satellite. Or at least down grade your package.
- Stop paying for expensive coffees every day, brew your own at home.
Obviously you should be realistic about what you cut and try not to set yourself up for failure by cutting out everything. Being able to stick to your plan and your budget should be your top priorities so don’t make it harder than it needs to be. Maybe look for less expensive alternatives instead of completely cutting something out, that way you won’t feel like you’re making too big of a sacrifice.
Start Working on Debt Repayment
Now that you’ve created a budget, finalized a spending plan and decided what expenses can be cut you need to start working on a debt repayment plan. Unfortunately debt repayment is a long process and depending on how much you owe, could take a couple of years. This is why you need to create a strategy and work on it diligently.
- Pay more than the minimum that you’re required to pay each month; this is the only way you’ll get out of debt in a reasonable amount of time. The problem with credit card debt is that the interest continues to accumulate, thus making it very difficult to make a dent in your debt. Make sure that if you have more than one credit card you’re paying off the one with the highest interest rate first.
- Make more than one payment. If you like making one large payment a month because it’s easier to keep track of then that’s ok, but no one ever said you can’t make more than one payment. If you end up having some left over money at the end of the month then do not hesitate to put it towards your credit card debt.
- Consider Credit Counseling. If you’ve been tough with yourself and tried to cut back but you still can’t seem to stop over spending then maybe you need to seek outside help. Acknowledging that you need help is the first step towards taking control of your finances. There are plenty of options for you including credit counseling and debt management programs. These kinds of programs will help you deal with your debt and your creditors.
The post-holiday financial blues happen to the best of it, but it is how you deal with them once January comes that’s important. The best thing you can do it is to set realistic goals and be as organized as possible. Plan for all situations that way you won’t be caught off guard when a financial issue comes up. Repaying your holiday debt doesn’t have to be impossible, focus on your end goal and work towards ensuring that you have a healthy financial future.