Top Financial Recovery Tips to Wipe Out Holiday Debt

Posted

financial recovery
Are you in need of financial recovery from the holidays? If you’re like most people, there’s a pretty good chance you spent a bit more than you planned to during the holiday season. Whether it was additional gifts, an extra special dinner out, or enough decorations to make Clark Griswold jealous, overspending during the holidays is a perfectly normal occurrence. In fact, according to a recent study by LearnVest, 74 percent of Americans rack up an average of $1,100 in credit debt—just from holiday overspending.

Planning your Holiday Financial Recovery

If that’s you, and you’ve dropped a bit more than you initially budgeted, it’s okay—you can get back on track with these financial recovery tips.  

Don’t Ignore It

The worst thing you can do when staring down a pile of debt, is ignore it and pretend it’s not a problem. By ignoring the cause of the overspending, you’re essentially treating it as a valid expense, which it may or may not be. In addition, you’re more likely to make only the minimum payments instead of tackling the debt directly, and so you’ll be throwing money out the window through high interest payments instead of paying it off and moving on.

Break the Habit

When you’ve spent a month or more traveling and overindulging, it can be hard to get back to living on your normal budget. So if you’ve created habits of eating out constantly, or buying things simply because they are on sale, address them now or the overspending may continue into the future. Take a look at your past month, where and how you’ve spent money, then consider if you’ve developed money habits that are a threat to your future budget. If they are, create a plan of action to address them as soon as possible.

Revisit your Budget

While we’re talking about budget, you probably will need to revisit your own. After all, you may have an additional credit card payment that you’ll need to include that you didn’t have before, or a larger pile of debt that you need to whittle down. Take a quick inventory: how much do you owe and to whom? Once you have this information, make a plan of action, putting as much extra funding toward that debt as possible.

Make Your Returns

If grandma bought you a new coffeemaker when your other one works just fine, you might want to consider returning it—and getting cash back. While it may feel wrong to take back grandma’s gift, consider this: she’d probably rather know you’re in good financial standing, than in a credit crisis. Can’t get cash back? Grab the gift card and plan to use it later on for a birthday gift or other household necessities—spending that would have otherwise come out of your own checkbook.

The Diet Checkbook Resolution

At the New Year, many people begin a diet or eating plan as a way to cut back on their caloric intake and focus on becoming healthier and more physically fit. Take the same approach but adjust it to focus on financial health by cutting out additional spending where it is unnecessary, and “trimming the fat” throughout your budget. Use January as an excellent opportunity to go on a Money Diet—cook at home, seek out inexpensive entertainment, make no extraneous purchases. One month of discipline can put your finances back on track and put you on the path to a profitable year. Double win: when that daily 400-calorie double vanilla latte gets scrapped, you’ll not only save 2800 calories a week, but you’ll also save about $35, too.

Make Plans for this Year

You may be over 300 days away from Holiday Season 2018, but it’s a great time to focus on what you can do differently this year, while the pain of recovery is still fresh in your mind. To do this, write out a few things that you did last year that you shouldn’t do this year, and make a few promises to yourself to do better. By thinking ahead, you can avoid the pitfalls from the beginning, rather than having to figure out how to repair them afterward. You may even choose to open up a Christmas Club account so you can be better prepared to enjoy the holidays this year.

Whatever your financial goals for the future, SC Telco can help you make and stick to a plan. Visit one of our locations and speak with a specialist to get started.