Get Your Budget Back on Track After the Holidays

Now that the presents are all open, the eggnog is drunk or spilled, and the New Years confetti is ground firmly into the rug, it is time to start cleaning up. But if you are like most other Americans, it will take more than a broom and some Mr. Clean to tidy up after this year’s Holiday Season shopping spree.

It might be scarier than Halloween to take a look at your bank account and realize how far off your budget you actually went this time.

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A recent survey from LendingTree found that more than a third of Americans took on holiday debt, averaging over $1,200 – the highest level in years.

If all this spending was guaranteed to make us happy, then it really would be a time to rejoice! But the same research shows the spending doesn’t always pay off emotionally: of those who went into debt, nearly half said they regretted spending as much as they did, and many were still paying off the previous year’s holiday bills.

But, don’t let this bad news dampen your holiday spirit. Even if you do regret buying that extra tofu turkey or you realize that treating yourself to those extra shoes, there are plenty of ways to get yourself back on track.

5 Ways to Recover Your Budget After the Holidays

First debts first

Attacking the new debt is usually first on the list. Since your highest interest debt will likely be your credit card, that is a great place to start.

“Many people piled new debt on top of old,” Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, suggests. “Try to cull out the charges related to the holidays and commit to paying those off within the first few months of the new year. This will at least get you back to your preholiday spending level.”

You may also be able to change your payment methods. Alex Dousmanis-Curtis, head of U.S. retail banking at BMO Harris Bank suggests “If your credit card was your go-to during November and December, consider using only cash or a debit card in order to stop debt from continuing to accumulate.”

Sell, sell, sell

Once you have stopped the new spending leaks, you may be able to make some quick money back by getting rid of the extra things you are paying to store in your basement or garage.

The easiest way is to identify the big ticket items, such as unused exercise equipment, sporting equipment or anything that takes up an entire shelf. Put these on Craigslist so that the shipping doesn’t kill you on other sites.

The next step is to go through your closet for brand name clothing to sell on eBay or at a local consignment store. Most smaller centers have a Facebook page that connects sellers and buyers if Craigslist is not as popular.

Brand name children’s clothes and textbooks on Amazon for students are some of the easiest ways to make quick money. While a pair of toddler pants might only net you $5, it can quickly add up, making it worth the effort. And $50-$100 per textbook can repair any smashed budget in a hurry!

Take a spending hiatus

If you have never had a no-spend month, it might be hard the first time. But it can be totally worth it. The idea is that you completely cut all frivolous spending (fast food, home décor, clothes, electronics, even food) and eat out of your pantry, fridge, and freezer for the entire month. Only buy groceries when it is absolutely necessary to get perishables. If you have packed away your holiday leftovers in the freezer, it might be an easy and tasty task.

Not only does this save you a bundle, it forces you to use up the food items that may have gotten lost in the abyss of your pantry or freezer. Put all the extra money toward your credit card or other debt.

Earn income on the side

If you are lucky enough to have a job that allows you to work overtime, now is a good time to start the year off strong. There are plenty of other ways to earn a little extra money such as freelancing, becoming a dog walker, or offering to take down other people’s decorations after Christmas.

Prepare for next year

If you have gone over budget this year, take it as a lesson and plan ahead so it doesn’t happen again. Start setting aside a little money each month to prepare for next year’s expenses. A budget app like PocketGuard can help you stay on top of your spending, while its budget calculator makes it easier to plan your budget and stick to it. It’s easy to get started, secure to use, and designed to help you build better financial habits.

Recovering from a holiday hangover can be tough, but with these easy steps and a little rest, you can get your finances back on track, which is a precious gift in any household.

FAQ

How long does it take to recover from holiday overspending?

For most people, holiday debt is manageable within a few months if you focus on your highest-interest balances first. Culling out the holiday-specific charges and targeting them by spring gets you back to your pre-holiday baseline.

What is a no-spend month? 

It’s a reset where you pause all non-essential spending (dining out, clothes, electronics, décor) and live off what you already have, buying only essential groceries. The money you’d normally spend goes straight toward debt.

How can I avoid overspending next holiday season? 

Start a dedicated holiday fund now and set aside a small amount each month, so next year’s gifts are covered by savings instead of credit. A budgeting app can automate this and keep you on track.