The holiday season is a joyous time of year. Unfortunately, it is also a time when we can easily fall into the trap of overspending. Overspending during the holidays can quickly turn into months (or even years) of financial stress as you struggle to pay off your credit card debt. Luckily, there are steps you can take to recover from holiday overspending and start the new year on better financial footing.
Understanding What Overspending Is
It’s no secret that the holidays can be a stressful time for many people. For some, this stress is due to overspending—an issue that affects millions of Americans each year. But what does overspending actually look like? How do people typically overspend during the holiday season? And what can advertisers do to help address this problem? Let’s take a closer look at the numbers.
According to a survey conducted by TD Bank, 69% of consumers admitted to having struggled with overspending during past holiday seasons. This figure includes both those who had gone into debt and those who had simply exceeded their budgeted spending amount.
So why do people struggle with overspending during the holidays? As the report suggests, many people tend to overspend during the holiday season as a result of pressures from trying to find the “right” gift or just taking advantage of seasonal sales. Unfortunately, this often leads to regret after the fact when bills and receipts come due—45% of people surveyed admitted they had gone over their budget by $300 or more! It’s important to remember that the best gifts come in all forms, not just those with hefty price tags at holiday time.
How to Recover from Holiday Overspending in 6 Steps
The holiday season is a time for celebration and spending. Unfortunately, spending during the holidays can quickly get out of hand and become overwhelming—especially when it comes to finances. If you find yourself in this situation, don’t worry! There are simple steps that you can take to recover from holiday overspending. Let’s discuss the six steps you should consider taking.
Step 1: Stop Overspending. The first step is to stop overspending immediately. It may be difficult to do so at first, but remember that your financial health is essential and the sooner you begin recovering, the better off you will be in the long run.
Step 2: Consider Returning Purchases. Once you have stopped overspending, take inventory of all of your purchases made during the holidays and see if any can be returned for a refund or exchanged for something else. This will help free up some funds that can be used towards debt repayment or another purpose.
Step 3: Assess the Situation. After returning any items purchased during the holidays, assess how much money was spent and how much debt was accrued as a result of overspending during this time period. Make note of how much money needs to be paid back or saved up in order to make up for any losses due to holiday shopping.
Step 4: Create Space in Your Budget. Once you’ve assessed your debt situation, create space in your budget by cutting back on unnecessary expenses such as eating out or going to movies frequently. Freeing up more funds will help you pay down any debts incurred during the holidays faster as well as build an emergency fund for future financial setbacks like this one.
Step 5: Choose a Debt Payoff Strategy. Now that you have an idea of what needs to be done financially after holiday overspending, choose a debt payoff strategy such as making minimum payments on all debts until they are paid off or focusing on paying off higher-interest debts first while making minimum payments on other lower-interest debts simultaneously.
Step 6: Consider Consolidation. Lastly, consider consolidating all of your holiday debt into one payment by transferring it onto one credit card with low-interest rates or taking out a personal loan with lower interest rates than those associated with credit cards and other forms of unsecured debt like payday loans or cash advances—allowing you more time to pay off these debts without having to pay additional fees or charges along the way.
Holiday spending doesn’t have to put an enormous strain on your finances when taken care of promptly and efficiently with these six steps in mind! By stopping overspending immediately and assessing your situation objectively before choosing a consolidation plan or debt payoff strategy, recovering from holiday overspending can be manageable—and even exciting once it’s all said and done! Keep these tips in mind when navigating post-holiday spending habits!
Get Informed About Loans and Credit
If you’re looking to better educate yourself on the world of loans and credit, an invaluable resource is myFICO’s blog. With the increasing trend of people using credit for day-to-day purchases, understanding how lenders operate and how credit works is essential knowledge. As myFICO’s trusted blog post authors provide a thorough and comprehensive look into charges, terms, interest rates, regulations and much more, consumers are able to make informed and responsible decisions on their financial future. From simple advice on choosing credit cards to extensive tutorials about refinancing mortgages, there is no shortage of valuable information available at https://www.myfico.com/credit-education/blog to ensure a successful financial journey.
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This article is intended for informational, entertainment or educational purposes only and should not be construed as advice, guidance or counsel. It is provided without warranty of any kind.