The ball has dropped, the New Year’s Eve confetti has been cleaned up, and now it’s time to face the repercussions of the holiday season. Your spending may have started as a little bit here for an office gift, a little bit there for a holiday party outfit, and finally, a splurge on a celebratory dinner out with friends.
Before you know it, all of those little bits quickly added up to a bill beyond your budget.
The holiday season may be the “most wonderful time of the year” for cheer. But if you’re like just about everyone else come January 1, your accounts may not be so merry and bright.
As the health nuts of the world dive headfirst into juice cleanses to restart their systems, consider a spending detox to help you get your wallet back in shape for the new year. Not only will it help reverse any debt you may have accrued this holiday season, it can set you up for better financial habits in the coming year and beyond. (Sounds like a solid resolution to us.)
Put a hard stop to frivolous spending.
A juice cleanse should keep you away from the cookies. Likewise, putting a hard stop to needless spending for a month or two can help reverse the impacts of financial splurges. Cut out unnecessary expenses where you can (a good place to start is by identifying your wants vs. needs):
- Step away from your computer: Online shopping and free shipping are a lethal combination when it comes to overspending. Either eliminate it or (if you really can’t) set a strict monthly limit to cut costs quickly.
- Unsubscribe: Do you even know how many services you’re subscribed to? Take stock of your subscriptions by auditing your credit card statement and deciding which ones you can live without. (Five separate streaming services? You don’t need all of them, we promise.)
- Respect the list: We’ve all been on a grocery run for one thing and ended up with a cartful of everything — except the item we came in for. This is what lists were made for, so make one and stick to it.
- Pack your lunch: It’s simple, it’s obvious, and it can save you so much money. Your wallet will thank you.
Try new ways to save.
Just like adding new healthy recipes can spice up your diet, trying some new ways to save can add some fun to meeting your financial goals. So, as you embark on a new year of spending habits, explore some less expensive ways to have fun while also supporting your health and well-being:
- Don’t knock homemade: Try out some thriftier gift options for birthdays, Valentine’s Day, etc. You don’t need to take up knitting (unless you want to) to create lower-cost gifts from the heart. Try baking something special or giving the greatest gift of all: your time. A fun outing with friends and family can be just as good as (if not better than) a new pair of headphones.
- Potluck it up: Hosting friends and family can be stressful and expensive (yes, we said it). But saving money doesn’t mean shunning your nearest and dearest. Potlucks redistribute the cost and get everyone involved.
- Catch up on your podcasts/TV show queue or host a game night: By the time you have tickets and popcorn, a night at the movies has become quite the investment (don’t even think about Junior Mints). A good old-fashioned game night can be just as fun as a night at the cinema … and you can BYOP (that is, Bring Your Own Popcorn).
Set realistic goals for the future.
We’ve all set those resolutions we know won’t make it to the end of January (let alone the end of the year). Just like your plans for 2020, the key to meeting your financial goals is pragmatism.
For instance, saying you’ll pay off all your holiday debt by mid-January may sound great in theory, but the reality may be that it puts unnecessary stress on you and sets you up for failure from the start. Instead, find a concrete repayment plan that works for you. That could mean one of many options (or a combination of a few), but make sure it includes these:
- Pay more than the monthly minimum requirement on your credit card. Bonus: This reduces the amount you owe in interest.
- If you have multiple credit cards with outstanding balances, consolidate where possible (and pay off the lowest balance first).
By building smaller, achievable steps into your larger goals, you’ll keep yourself motivated and moving forward.
Don’t forget about fun.
Cutting down on trips to the movies, avoiding too much takeout, and not overdoing it on rideshares is a great way to get back on the right financial path. But don’t let your savings resolutions suck all the fun from your life. Once you’ve detoxed from your holiday spending, it’s important to find a good balance between fun and fiscally responsible.
As with a healthy diet, moderation is key. So, for every splurge you make, consider making a contribution of equal value to your savings account. That way, you’ll never have to completely go without — now or in the future.
Start saving for the next holiday season (or your other goals).