You wouldn’t be the only one waking up in the New Year regretting December’s festivities. There’s no hiding from holiday overspending in the cold, hard light of January. The damage done to your household budget is as clear as the bright blue skies.
If your wallet is hurting as much as your head on New Year’s Day, you wouldn’t be the only one. The Globe and Mail reports most Canadians fall into the “holiday debt trap” after they spend without prejudice on presents, travel, food and drink, decorations, and entertaining. As a result, saving more and spending less often makes it to the top of the nation’s New Year’s resolutions.
If you count yourself amongst those ready to tackle debt in a brand-new calendar year, let the following tips be your holiday spending hangover cure.
1. Prevention is the Best Defence
If you’re reading this before the holidays, then you have the advantage of starting early. Taking the time to budget properly for the season is one of the best ways to manage debt. The earlier you sit down with your budget and determine what you have to work with, the better. If you have months to prepare, you can cut out frivolous spending habits (like those weekly takeout dinners and that one-time upgrade to the iPhone X) and use that cash on gifts.
Without the advantage of time, you may not be able to redirect funds into the season, but it’s still a valuable tool. It will let you know just how much cash to spend on gifts. Financial advisors suggest it shouldn’t exceed 1.5 percent of your annual income. If that’s a lot lower than you usually work with, rely on money-saving websites and apps to help keep necessary spending to a minimum. You may be surprised by how much you can save with the right coupon or rebate.
2. Be as Specific as Possible with Your Goals
Let’s say the holidays have come and gone and you never once thought about your budget until you’re staring down the credit card bills in your hands. That’s okay! Any debt is surmountable if you organize yourself properly.
Don’t just say you want to spend less or pay off all your debt. These are vague ambitions that can be hard to measure. Without clear and achievable steps, you can be discouraged by your lack of progress. No one can pay off all their debt in one go, so don’t hold yourself to these unrealistic standards.
Instead, consider smaller goals with measurable tasks. Think about specific bills you want to pay off and a deadline, the dollar amount and frequency of your payments, and how to adjust your spending to account for these payments.
3. Make a Realistic Budget
Specific goals need a practical financial plan. Though you need to trust in your ability to stick to your plans, unchecked optimism will get you nowhere. Financial security is the end goal, but it’s a road paved with unexpected temptations and emergencies, so it may not happen as soon as you expect it to.
There’s no failure in relying on financial assistance as your re-build your emergency nest egg. Sometimes the only way you can cover unexpected expenses in the New Year is with instant payday loans until you can start contributing to savings. Talk with an expert if you want to learn more about getting a payday loan, so you know how these financial products can help you in your time of need.
Financial assistance is a practical way of covering non-recurring essential bills as you reorganize your budget, but they aren’t a permanent solution to on-going debt. Rely on them sparingly, and they can be effective tool, but be sure to establish a timeline when you expect to repay these fast payday loans and use your own cash for necessities.
When you take the true spirit of giving a little too seriously over the holidays, your festive fun is soured by debt in the New Year. Limit its effects by making your finances a priority, and you’ll be able to undo the damage you’ve done to your budget in no time.