The holiday season often leads to unintentional overspending. With enticing offers at every turn and a plethora of tempting “nice-to-have” items, it’s easy to succumb to the allure. Whether purchasing gifts, decorating, indulging in personal treats, or gearing up for social events, holiday shopping might have prompted you to exceed your budget. The abundance of Black Friday specials, holiday sales, and seasonal discounts may have distorted your perception, creating a sense that you were spending less than you actually were. Amidst the shopping spree, you might have found yourself repeatedly thinking, “This is a great deal!”
According to the National Retail Federation, holiday spending during the peak season in 2002 reached $936.63, which is 5.3% more than in 2021. So, know that you are not alone when it comes to overspending during the holidays. There are ways to avoid overspending, and hopefully, those will be some things to take into consideration for the next holiday season.
But what do you do now? It’s not until January that you realize you should have walked past some of those great deals and you didn’t have as much money as you thought. Now, bills are due, and everyday living is necessary. What do you do when you’ve blown all your money during the holidays?
1. Realize Your Problem
First, you want to realize you have a real situation. Bills need to be paid, and you also need to eat. If you’ve overspent and your account isn’t looking likely to take care of all your expenses, you have a problem. Don’t ignore the problem; that will not make it go away. Admitting you have a problem is the first step toward finding a solution.
2. Don’t Be So Hard on Yourself
Now that you realize you have a problem don’t be so hard on yourself. Mistakes happen. But now it’s time to fix the problem. With every problem comes solutions, so get to it. Learn from past mistakes and move forward with a plan to fix them.
3. Assess the Damage
Review your current financial situation to know what needs to be paid immediately. At this point, all unnecessary spending should be paused. Doing this freezes the overspending. But pertinent things like rent or mortgage still need to be paid. You also need to ensure you have food in the home. Nothing outside of necessities should be paid at this point. You should also put away the credit cards—for now. Once you know the pertinent spending that has to happen, you can start focusing on how to get those settled.
4. Look to Other Accounts
Use money you have to focus on paying for your necessities. You may need to look to other sources if you don’t have any money. If you have multiple accounts for varied reasons, it’s time to start looking to them for help. If you have a vacation fund or similar accounts, you may want to start with them to help pay bills that need to get paid. That means you may have to put that expensive vacation on hold for another year.
5. Pay Over Time
If other sources are not an option for you, you may need to come up with a plan to get your bills caught up over the next few months. You can start this by contacting your creditors and asking for a payment plan or having them advise you on other options without having to pay a bunch of late fees. If they don’t seem responsive to that, ask them about leniency, flexibility, or grace periods.
6. Consider Ways To Increase Your Income
The beginning of the year is a perfect time to think about adding additional income. If making more money is one of your goals for the new year, this is a great time to start.
Start Charging for What You Enjoy Doing for Others
Thinking about a side hustle? Consider the gifts and talents you possess that could immediately earn you money. Oftentimes, we do things that benefit others, and we don’t charge for our time or service. It’s time to start thinking differently. It’s time to start charging for what you do.
Negotiate a Pay Raise
Has it been a while since you got a raise at work? Now would be a great time to talk with the powers about a raise. Learn how to negotiate a raise.
Sell What You Don’t Need
Have you been meaning to clean out your closet? Don’t just clean out to give away; consider selling items you no longer need.
The time is now to start thinking strategically about earning additional income to recover from the holidays.
7. Make Changes for the Coming Year
Review your bank and credit card statements for a hard look at how you spent money during the holidays. Modify some of those mistakes now by making a holiday budget for the coming year. See where you overspent and dial it back for the coming year. It’s never too early to create your holiday budget. In fact, when you know how much you plan to spend on who and what, you can pick up what you need intermittently throughout the year, especially when you come across sales. Spreading your spending over time causes you to spend less as you get closer to the holiday season.
If you keep a monthly budget, you may also consider modifying some things in the months leading up to December to reflect a more realistic view of how you intend to spend.
The Bottom Line
It’s not unusual for people to overspend over the holidays, but it’s a mistake when we don’t address and deal with the problem immediately. Realizing you’ve overspent, pausing your spending, and determining ways to meet immediate financial needs are all necessary to bounce back. So, deal with the problem now so you can enjoy the next holiday season with friends and family without the stress of overspending.