After each holiday season, we often resolve to spend less money but we rarely stick to this resolution. Sometimes we even spend more. If we overspend on stocking stuffers or the newest electronic gadget, we may still be paying for it come the new year! Here are ways to recover from excess holiday spending and stick to our commitment to spend less next holiday season.
Step 1: Return any unneeded or unwanted items. If you received two of any gift, return the extra one or exchange it for something you need, like a birthday gift for a family member. If you return the item, use the cash toward your holiday credit card invoices.
Step 2: Double up on credit card payments. This will keep costly finance charges to a minimum. If possible, pay the balance on holiday credit card bills. If this is not feasible, reduce other expenses so you can double your credit card payments until holiday expenses have been paid.
Step 3: To have extra cash for paying holiday expenses, refrain from dining out or spending on entertainment. You likely received some DVDs or games as holiday gifts, so have family game night. Those who prefer quiet relaxation can crack open the new book that Santa dropped in their stocking.
Step 4: If you anticipate a tax refund, prepare your taxes as soon as possible. Use the refund to pay off the holiday debt or start a fund for next year’s holiday spending. Depositing the money into a high-interest savings account or certificate of deposit will earn some interest and discourage spending the money on frivolous items.
Step 5: If you are lucky enough to have cash left over from the holidays, or you got some as gifts, do next year’s holiday shopping during the post-Christmas sales this year. You can save up to 75 percent and get all your decorations, gift wrap, holiday cards, stocking stuffers, and even some big ticket items.