The holidays can be rough on your finances, and many people greet the new year realizing they overspent during the holiday season. Between gifts, travel, entertainment and other expenses, the costs add up. How can you get back on track financially after overspending?
It’s not as hard as you might think. With a little financial belt-tightening, you can pay down debt you accumulated over the holidays and save for your 2019 expenses in advance. Here’s how to do it.
Figure out how much you spent
Review your bank and credit card statements and evaluate your total spending. If you share finances, include your significant other to get a clear picture of how much you both spent. Even if you didn’t accumulate credit card debt, you might have pulled money from your Savings Account and set yourself back on reaching a financial goal. Knowing exactly how much you spent is helpful for paying down debt and setting realistic expectations for next year.
Pinpoint ways to save
Tighten your spending for a couple of months to get back on track. Institute a “no buy” month, where you won’t buy anything unnecessary. Give up restaurants for two months or cancel or freeze your gym membership and walk instead. Commit to your savings plan for a couple months to see a big return. Speaking of returns, try returning unwanted gifts or impulse buys for cash back. Or, if you have Credit Card Rewards like Mission Rewards, use the points you earned to get cash back and use that cash for your Credit Card payment.
Make a plan to repay
Once you know what you spent and where you can save, figure out how to repay yourself quickly. Replace spent savings and pay down debt fast before you build extra interest on your debt or have to postpone financial goals, like buying a new car or investing in home improvements. It’s smart to use goal-setting tools, like those available with Mission Fed’s Online Banking, so you know exactly what you’ll need to save each month. Consider making double payments on credit cards or putting twice the normal amount in savings.
Leave the plastic at home
Put your credit cards in a drawer and leave them there for now so you’re not tempted to use them until you’re back on track. Consider leaving your debit card at home, too, spending only cash until you’ve repaid any debt or spent savings. Research shows people spend less when they only use cash, and doing so helps curb impulse spending and re-establish healthy spending habits.
Plan for next year
Once you’re clear on how much you spent in 2018, and the effort it takes to get back on track, you’ll be more inclined to plan ahead for the next holiday season. Start now by opening a Mission Fed Holiday or Summer Saver Savings Account. When you save in advance over several months, it’s manageable to have the money you need, without causing yourself financial stress or getting into debt.
Stop by any branch, go online or call us to find out how Mission Fed can help you with your financial goals now and throughout 2019.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. Mission Federal Credit Union disclaims any liability for decisions you make based on the information provided. References to any specific commercial products, processes, or services, or the use of any trade, firm, or corporation name in this article by Mission Federal Credit Union is for the information and convenience of its readers and does not constitute endorsement, control or warranty by Mission Federal Credit Union.
