Don’t worry if you’ve spent a bit more than you’d like to have done this holiday season, because you’re probably in excellent company. Unexpected expenses can happen at any time of the year, it just seems to happen more frequently around this time of year. Anything from finding out your little black cocktail dress from last year has mysteriously gotten smaller to last minute gifts to unexpected travel delays all add up to big bucks and can make a healthy savings account start to look mighty sickly.
There is still time before the holidays, but if you’re already feeling anxious about how much you have/will spend, don’t despair because you can recover – just don’t use breaking the budget a little bit as a justification for breaking it a ton! Here are a few tips that will help you get back on track and pay off the credit cards and/or get your bank balance back up.
Make a Firm and Specific Plan to Repay Your Debt
Even if the money came out of your savings, you should still consider this a debt to yourself and plan on repaying it accordingly. Don’t make a vague plan like “save more money”; set a specific goal for yourself that you can’t wiggle out of. For example, if you spent $500 extra, you could make a goal that you will cut out $125 a month out of your discretionary spending and put it into savings for the next four months. The same principle applies to credit card debt.
A specific goal with a deadline lets you see exactly what needs to be done and helps you to be motivated to see things through. You can sweeten the deal by promising yourself and/or your family a small reward when the goal is met. On the other hand, without a deadline, it’s easy to put things off and promise yourself that you’ll do it next week or month.
Go on a Spending Diet
I’m not usually a fan of cutting spending to the bone except when you have no other choice or, as in this case, when it’s a temporary measure to meet a specific goal. It’s much easier to stick with a drastic reduction in spending when you know that it’s not a forever thing and that you are working to accomplish something important.
Begin by looking for little luxuries that you can cut out without affecting your quality of life too much. Could you stop eating out entirely for a month or two? Watch movies at home instead of going to the theater? Go on a no-spend challenge for one month each week until your goal is met? Clean out the freezer and pantry instead of buying groceries?
Austerity plans can seem grim and it can be tempting to give up, especially when the need doesn’t seem urgent. Remind yourself every time you are tempted that having financial security will allow you to enjoy life more in the future. Look for ways to make your progress tangible – for example, if you are cutting out a daily coffee drink, deposit $3 or however much you usually spend into a piggy bank every day that you would have normally had a coffee but didn’t. If you don’t carry cash, you could keep track on a chart or some other way that lets you visualize how much your sacrifices are adding up. And remember, this is just temporary and you do have an end in sight!
Look for Ways to Earn Extra Money
You can accelerate your recovery by bringing in more income. For ideas, check out these previous Money Ning articles:
January is also a great time to clear out the clutter from our homes, so why not look for things that you can sell at the same time? While a yard sale isn’t practical in most areas, Craigslist, eBay, Amazon and free ads in local papers/websites make it easy to sell your old exercise equipment, tools, bikes, books and more.
Consignment stores are an option if you have gently used, still stylish clothing. Many churches and community organizations also hold indoor rummage sales as fundraisers. You’ll have to pay a table rental fee, but in exchange, you’ll be able to attract a much wider crowd. If you are skilled in arts, crafts or cooking, you might also be able to sell things that you’ve made at local farmers markets, flea markets or community events.
Be Grateful and Kind to Yourself
These things happen. We’re all human and we all live in an imperfect world. Learn what you can from the experience and move on. Embrace a feeling of gratitude that you were able to sort things out and that you have the opportunity to make things right again. Be proactive about saving, but don’t fall into the trap of being overly anxious about money. Remember – you have a plan of action, so there is no need to feel sick over your diminished bank balance or increased debt. It’s just a problem that you will tackle, not an indictment of your character!