Hangovers aren’t the only thing we wake up with in January—a lot of us also find ourselves with extra credit card debt or a hole in our budget. The holidays are such a fun time of the year, but it goes without saying that they can come with a hefty cost. It’s too easy to overspend and get off track with your financial goals between festivities, holiday outfit planning, and gift-giving. And even if you carefully laid out a holiday spending plan ahead of time, unexpected costs add up quickly. There’s good news though: Now is a perfect time to revisit your overall financial plans, and getting spending under control is a big part of that. Here’s how to recover:
Return to your regular budget
Get back to your regular budget and everyday spending habits as soon as possible. It can feel tempting to throw in the towel for a couple of weeks post-splurging and delay tackling some of the habits that snuck in over the holidays. But it’s a similar mentality to what the best nutritionists share about splurging: Don’t have a “diet starts on Monday” mentality. There is no better time than now to make changes for the better.
Dining out and groceries are some of the sneaky budget categories that get out of whack this time of year, so look there first for places to reset. If that means that your morning coffee budget is usually $2, wave goodbye to your specialty $5 cup for a while! It’s time to wean off of fancy lattes and high-end charcuterie board-style groceries.
Decide how you will recover your accounts
Open up all of your holiday bills and take a close look at the damage. This isn’t easy to do, but it’s the only way to know how much and how fast you need to recover. In the holiday rush, it is easy to forget expenses that happened earlier in the season, so you want to be sure you have a complete picture of what needs to be taken care of.
Be very detailed, and challenge yourself to define exactly what you can pay off and when. You will be much more likely to reach your payoff if you set concrete numbers and deadlines. For example, you might decide to take 10 percent of your “fun money” from your next four paychecks and allocate it to your debt instead.
Make a plan to increase your revenue
Budget cuts can only go so far. At some point, a more fulfilling option can be finding ways to add to your income. This can look a number of different ways, and early in the year is a perfect time to think about all of these options. Have you been considering a side hustle? It’s time to act on your dream or bulk up your client prospecting to bring in a little more cash. Could your closet use a clean-out? Find the best ways to sell some of your old clothes, which likely got bumped out of rotation by a few holiday purchases anyway! Not only will you bring in some money, but you’ll also start the year feeling a little lighter.
Last but not least, the beginning and the end of the year usually come with bonuses or a raise (hopefully!). Strategize how you will allocate the extra income, or practice your negotiating skills to earn a salary increase.
Decide what changes you need to make for next year
Throughout this process, you might have noticed some line items that didn’t necessarily need to be as high or on your statement at all—like an expensive holiday manicure or a new dress for a party. Maybe you even accidentally doubled the amount of money you planned on spending on your siblings or forgot to budget for gifts altogether. Office pals, neighbors, and hair professionals are all categories I regularly forget to budget for, but they can make up a big portion of expenses! Further, I used to not have a separate line item for wrapping paper and Christmas cards, but after a few Target runs, those become too much to leave out of the holiday budget as well.
Decide what needs to be different for next year and document your budget changes in a notebook or in your phone (I also like to email myself!), so you have your plans handy when the holiday season rolls around again. Do you need to start saving mid-year or adjust savings rates? Schedule an email or set a calendar reminder for then. This way, you can be proactive instead of reactive.
Give yourself a break
Splurging and feeling guilty is as unhealthy a cycle in finance as it is in nutrition! At this point, what’s spent is spent (unless you’ve still got some returns!). Costs during this time of year usually result in memories and traditions and in the pursuit of celebrating with your loved ones. Instead of feeling guilty about your choices to go off budget, think about how much you appreciated the holiday experiences and memories you had.
Further, know that someone in your circle probably experienced some budget-busting moments as well, meaning it can be even more appreciated if you go the extra mile to send a thank you for any gifts, experiences, or hosted events you enjoyed from someone else.