Jun 20, 2023
How to Recover from Holiday Spending
Reading time: 9 minutes
Did you overspend on gifts this holiday season? According to the National Retail Federation, consumers spent $312 on presents in the 5 days between Thanksgiving and Cyber Monday last year. Clearly, lots of us overspend on holidays and that’s because the majority of us don’t set up a budget for holiday spending habits and expenses ahead of time.
That's where this PureTalk post can help.
If you have six people on your holiday shopping list, it would be wiser to decide in November – or better yet, now – how much you’ll spend on each. If your maximum is $100 per, you know right this moment that $600 is how much you need to have saved before you start shopping next holiday season. (Although you might want to save a little more for shipping, if indeed you have to mail any gifts, and really prevent a holiday spending hangover.)
Prevent holiday debt for next holiday season
Planning for holiday expenses will keep your gift giving going while keeping your holiday overspending under control. At this point, though, you need to recover, save money, consolidate debt, and pay down any holiday debt and credit card debt from this year’s holiday season holiday spending. You could meet with a financial advisor at your bank or use some of the following ways to get back on track financially.
Assess your credit card situation
Oh credit card debt. Easy to get into, especially during the holiday season, and tough to get out of.
What to do: Log on and check your credit card bill statements. If there’s a holiday spending charge you don’t recognize, handle it pronto. You don’t need to be paying for holiday spending that's not yours! Make a note of the balance on each of your credit cards and total them up. This way there will be no surprises in January, and you can prepare now.
Also, note the interest rate for each credit card. Pay down the one with the highest rate first. For the cards with lower interest rates, make just the minimum payment (or, if possible, pay more than the minimum monthly payment) while you work toward paying down the higher rate card. Once that holiday debt is paid off, take the money that’s now freed up and put it toward the next debt. Repeat as needed. The faster you do this, the lower your interest payments will be.
In addition, you can consider taking a personal loan. The best have rates starting at 4%, far better than the 13% to 20% on a credit card.
Return unwanted gifts
Did you get something this holiday season that you don’t like or can’t use? Probably. So, return it. Even if you only get store credit for your returns, it’s worth the effort. At some point you’ll be able to use the credit for something you do like and can use and it won’t cost you anything to do so.
Sell gifts you don’t like that you can’t return
Never before has it been easier to sell stuff, and brand-new stuff is the easiest to sell of all. (Especially after the holiday season when those who didn't get what they were hoping for are eager to buy it for themselves.) Craig’s List, eBay, Facebook Marketplace are all easy-to-use options. But don’t forget consignment shops! Those mom-and-pop businesses deserve our support and are usually delightful to work with. Be careful though. Once you see how easy it is to make money with a consignment shop, you’ll be tearing through your closet, grabbing items you haven’t worn in years, and bringing them in. Just don’t hurt your back lugging those bags!
Donate what you can’t sell
Get a receipt, and it’s a tax write-off.
Sell gift cards you can’t use
You’re a Starbucks fan stuck with several Dunkin Donuts gift cards. Or maybe you received a gift card to Bloomingdale’s, Cracker Barrel, or Old Navy and there isn’t one near you for fifty miles. Sell them for cash at sites like Gift Card Granny or Card Cash. Then take the extra money and put it toward your credit card bills.
Challenge yourself to a no-spend January
Sure, you’ll still have to buy gas and groceries and other essentials, but a no-spend month is a great way to reign in the little extras monthly expenses that add up and January is the perfect time to undertake this endeavor. It can be fun, too, particularly if you get a group of friends or coworkers to do it with you.
Together you and your friends can find things to do that don’t cost anything, and you and your coworkers can support each other in not going out for lunch every day. Keep track of what you didn’t do and the amount of you saved by not doing it then total it up at the end of the month. The amount of money you can save this way will astound you.
Use the gift cards you like
If you received gift cards you can actually use, to your favorite nail salon or hair salon, favorite restaurant, wine shop or other retailer, use them during no-spend January to reward yourself for being so fiscally responsible.
Start preparing your tax return
Nothing says “don’t spend money” like preparing your tax return. It literally kills the desire to go shopping. Focus on your tax return and, if you get a great refund, plan to use most (if not all) of it to pay down your credit cards or start an emergency fund.
Check your credit score
Coming off the holidays with holiday identity theft rampant, it’s important to stay on top of your credit score. If you see something incorrect or something you don’t recognize, the sooner you report it the better.
Reduce other expenses
Cable television. Magazines. Gym memberships. Weight loss and meditation apps. These and other monthly bills are subscriptions so many of us forget about, but still get charged for. Set aside time to review your credit card statements and checking account statements and you might be amazed at the number of items you thought you cancelled but are still paying for. Don’t have time to do it yourself? That’s ok. Try Truebill. The site searches forgotten subscriptions on your behalf quickly and easily. But just be aware that for every dollar you save by using the service, Truebill takes 40% as what it calls a “savings fee.” So if they save you $500 annually on a particular bill, they’ll charge you $200.
Switch cell phone carriers
If you’re using one of the pricy wireless providers – Verizon, AT&T, or T-Mobile – you could save yourself a bundle extra cash by switching to PureTalk.
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Posted 9 months ago