What is the status of your bank account after the holidays? All the holiday shopping is good if you stayed within your budget or if you can pay your credit card bills within a couple of months. However, that’s not always the situation. Some people usually overspend and accumulate debts, which is never good to start the New Year.
The aftermath of overspending during the holidays will only be felt in the coming year. But there are many ways to start the New Year right and recover from your overspending dilemma. Here are some helpful tips to help you recover financially and have a prosperous New Year ahead.
1. Assess the damage.
Calculate how much you spent, and where the amount came from. List the purchases and sum up how much you have used up using your credit card with the interest rates or other accounts you have used.
2. Pay off all debts.
For credit card users, you can avail of a balance transfer which offers a zero percent interest. Find ways to reduce your debt like using gift cards for your next purchases and make sure to set aside a budget for paying these loans until they are all settled.
3. Find other sources of income.
If you’ve overspent, it means that you have spent more than you earned. Find other sources of income to make up for the overspending. Try selling your old stuff that you don’t use in a garage sale, or bake some goodies to sell online. It doesn’t matter how much you earn, what’s important is it could help you cover some of the damage from overspending.
4. Use your incentives and bonuses to pay your debt.
Before you spend your bonuses or incentives on other purchases, pay your loans and debts first. If you spend before paying off your loans, you would never financially recover.
5. Cut back on other unnecessary expenses.
It isn’t wise to spend more when haven’t recovered from overspending. Dining out and entertainment expenses can take a toll on your finances if you haven’t recovered from your holiday expenses. You can always find ways to enjoy even without spending too much.
6. Don’t accumulate additional debts.
Accumulating more debts by using your credit card or loaning to pay off other debts can bury you in financial misery. Don’t accumulate additional debts until you’ve paid off all your loans.
7. Save up for the next holidays.
Save up every week an amount to cover up for your holiday budget. You can use an automatic transfer so that it will really go for that purpose.
8. Learn from your financial blunders.
Learn from your mistakes. Understand your financial weaknesses. Do you tend to shop when there’s a bargain sale? Avoid the mall until you’ve paid up your credit card. Are you easily pressured to treat your friends and family even you’ve got no resources anymore? Suggest to your friends to share the bill. Tell your family that you cannot treat them for a while yet. They will understand.
Look for ways to save. Don’t try to add more burden to your financial situation so you won’t be in the same situation again. Start the New Year right and avoid the debt trap.