The holiday season often involves a whirlwind of spending that doesn’t really hit you until the bills roll in. With some of the right strategies, you can help get your finances back on track.
Once the holidays are over, the New Year presents a great opportunity to reassess and reset your finances. If your credit card took a hit from all the gifting, feasting, and celebrating, then take it as a chance to reign in your spending and build some better habits going forward. Use these practical tips to help you get started.
1. Take a good look at your finances
The first step to cutting back on spending is to get a good overview of your entire financial situation. Review your bank and credit card statements to see exactly how much you spent over the holidays. It might be a bit of a shock, but understanding where your money went is key to reining in your expenses. Once you have a clear view of your finances, you’ll be better able to set effective goals.
2. Revisit your budget
With a good picture of your finances, you can revisit your budget more effectively. List out your necessary expenses, then look for places where you can cut back. To find these saving opportunities, be honest about your spending habits. For example, if you’re used to dining out several times a week, try limiting it to once or twice and opt for home-cooked meals on other days. Another easy place to save is to reduce your subscription services, which can quickly add up if you’re not keeping track of them.
3. Resist those post-holiday sales
It can be difficult to get out of a shopping mindset after the holidays, especially when outlets start advertising tempting post-season sales. If an item on sale is something you truly need and have budgeted for, then of course you want to take advantage of a fantastic deal. However, it is important to resist impulse purchases of things you would not have bought otherwise. If it’s an item you’re not sure of, then try to wait at least 24 hours before making your final decision. The thrill of finding a good deal might fade and you will decide you don’t really need it after all.
4. Practice a “no-spend” January
No-Spend January has become a trend in recent years as a way of helping people curb their spending habits after the holidays. Of course, it is impossible to not spend any money on essentials like groceries and bills. Instead, the idea is to entirely cut out non-essential purchases. Depending on your current spending habits, this can include not ordering any takeout, not visiting coffee shops, not buying any new clothes, and no activities like movies or concerts. Instead, focus on finding creative ways to enjoy free or low-cost activities, like visiting local parks, organizing a game night with friends, or hosting a movie marathon at home. Even a short no-spend period can help you realize how much you’re spending on things you don’t really need.
Ease your budget back into balance with some smart tweaks and mindful choices. By making changes to your spending practices after the holidays, you’ll quickly find yourself on firmer financial ground.
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