Finance Guide

How to get your finances back on track after the holidays

By: Mariah Rogers
Jan 28, 2022 • 2 min read

Trying to get your finances back on track after the holidays? Here is your go-to guide.

Between buying presents, food for parties, and ugly sweaters, it can be a bit nerve-racking to look at your checking account after the holidays. If you feel like you spent way above what your budget could afford, don’t worry! It happens to everyone, and there are many simple steps that you can take so that it doesn’t feel like you’re drowning in bills. If one of your resolutions this year is to get in control of your finances, this article will share wit the best tips to help get your finances back on track in the new year.

Figure out what your situation is right now

Have you ever made a big purchase and then were scared to even look at your credit card statement at the end of the month? As much as it’s not the greatest feeling to see large amounts of money leave your bank account, ignoring it will only make it worse. Instead of getting preoccupied with a huge purchase, you can’t forget about your other payments too.

When your statements come, pay attention to the minimum payment that’s due. If you don’t think that you can afford to pay off the entire bill, sometimes you’re only required to pay a fraction of what’s due. While this isn’t necessarily the best option, it will give you some extra time to make all of your payments. Keep in mind that you have a certain amount of time to pay the remaining balance before it affects your credit score.

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Reflect on what you could have done differently

Once you know where your finances are currently, think about what you could have done better over the last several months. Off the top of your head, you might think to yourself, “oh, I didn’t need that pair of shoes” or “did I need to order out for dinner twice in one week?” but it’s more than just that.

You might not realize how much you spend total on groceries each week or how much all of your streaming services cost together. Seeing everything written out in front of you will allow you to get a better sense of where your money is going each week. Then, you can discern whether you should be saving that money instead.

 Review your current budget, and make changes

If you have a budget, now is the time to modify it. Even if you’re on top of your finances, your life is always evolving, so your budget should adapt. And, if you don’t have one, this is probably one of the main reasons to why you’re struggling.

First, write down your income. Make sure to consider any withdrawals for taxes, 401k, or other benefits. Next, write down all of your expenses. You can give it your best guess or look back at your old statements and/or receipts to get a better idea. Once you’ve figured this out, subtract your expenses from your income, and then you’ve discovered your discretionary spending, which refers to non-essential items like entertainment. Over the next month or so, track your expenses each week to see if you stuck to your budget. It’ll inevitably need some tweaking, so be patient.

 Limit yourself

Even when you are conscious that you can’t afford to spend that much, credit and debit cards still make it way too easy to spend over your budget. Especially when you’re in a deficit, it’s better to carry cash and to put the cards away.

As you shop or skim through your emails, don’t fall for the post-holiday sales. Many times, retailers will take items that did not sell over the holidays and give them a markdown. No matter how good the deal is, it’s not worth it. So, if you don’t need an extra table cloth, don’t get it.

 Stick to a schedule

When do you get paid each month, and does it fluctuate? When are your bills due, and do you have to pay them monthly? Even if you always make your payments on time, it’s not always the best idea to pay your bill randomly as the due date approaches. This is because you might forget about a certain payment and then make a purchase that you can’t necessarily afford. Maybe your utilities and water fluctuate each month, so it’s important to check this before the due date. Getting into a habit of paying your bills on the same date each month will avoid the unsettling feeling of forgetting about one that’s due in a few days.

Sticking to a schedule also means that you shouldn’t miss any of your payments. It might be tempting to wait a few more weeks, but it can end up hurting your credit and leading to higher interest.

As you start to pay off credit card debt, it’s pertinent that you start thinking about other payments, like loans. Know how much you owe each month, and make sure that this is accounted for in your budget and planning each month. Creating a plan to pay off any debt is crucial to getting financial independence.

get your finances

 Learn how to prioritize

Yes, you don’t have to live off of ramen and avoid showering, but there are some expenses that you can hold off on until you have some extra cash to spend. As you budget, know exactly what you have to pay each month for bills—this should be your top priority. Then, before you even consider an allowance for yourself, think about other payments.

Maybe you can put down extra on your student loan principal this month, or maybe you want to put that into your savings. Regardless, the money left over after you pay your bills should not automatically become “spend money.”

 Make small goals

Once you understand what changes you can make to get yourself in a better spot, you still might feel a little on-edge. Rather than focusing on the main goal of gaining control of your finances, break it down into small goals. Creating an effective budget is a huge goal to be celebrated! Goalsetting makes financial independence a lot more achievable.

These goals should also be achievable. If you need to drive to work each day, it’s probably not permissible to

 Start saving and planning for the unexpected

As you pay off your debt, it might not be possible to save that much—even if you aren’t in debt, it’s still hard. Saving is a passive way to increase your wealth, like investing. So, if you haven’t yet, now is the time to set up a savings account. A good rule of thumb is to put away at least 10% of your income each month. If this isn’t possible yet, that’s okay, but even if you have $50 to put away, this is a good way to start getting in the habit.

Having a rainy-day fund is important because you never know what’s going to happen. You might get sick, laid off, or maybe your friends will want to go on a trip that’s a little out of your budget. It also helps you start to prepare for things like purchasing a house or retirement. So, if you get a bonus at the end of the year, consider putting at least some of it into your savings.

 Don’t get discouraged

There’s a reason we’re writing an article on this. Many people are in the same situation as you. It might seem like all of your family were able to get nicer presents than you for the holidays, but maybe they got a bonus at work that you don’t know about. Maybe it seems like none of your friends are struggling to make their student loans or car payments, but they might be getting help. The point is to focus on your situation at hand and what you can control.

You also need to be realistic. You’ll need to reach certain goals before you can achieve others, and you might make some mistakes along the way. As long as you are learning and making progress, that’s all that matters.

get your finances

Get organized

Being unorganized will only amplify your stress. If you have papers everywhere, consider going paperless. It will be easier to track your statements and other paperwork if it’s saved to a deceive rather than shoved into a random drawer. After, consolidate everything. For important papers, keep them in a binder in one location, or scan them onto your computer. Shred anything else that’s not important, like ATM receipts or bank deposit slips.

Get a side hustle

Financial instability can come from many different problems, but one of the main issues for many people is insufficient income rather than impulsive shopping. If you have some extra time on your hands, side hustles are a great way to alleviate some of your financial stress. Whether you sell art online or tutor for a few hours on the weekend, you have complete control. It might also be time to work on your resume so that you can explore other jobs that can help you meet your goals better.

Consider redeeming cashback

While it’s always better to save your cashback when you can, during times like this, it can be a great advantage. You might only have a few hundred dollars saved up, but that could cover gas, groceries, your cable bill, or maybe even all of them. This shouldn’t be the first place that you turn to, however. Figure out realistically how much you can afford to pay this month, and then consider your cashback.

Track your spending habits

It might take some self-discipline at first, but tracking your spending is the most effective way to get back control of your finances. You can make your own spreadsheet, or there are many available free to download online—or just stick to pen and paper. Creating a budget will help you understand where your money tends to go each month, and it will also help you to figure out what your “allowance” is. Even $20 here and there adds up over time.

Set reminders

Don’t just set a reminder on the day that your bill is due. If you remind yourself that you have payments coming up, you might not be as inclined to stop for food on the way home from work. Some banking apps also allow you to conveniently set up customizable notifications. For example, you can get a notification every some your credit card is over a certain limit. With the help of a few reminders, you will become more accountable.

1 U.S.A dollar banknotes

Challenge yourself

If you wake up each morning living in the shadows of your debt, it will only make matters worse. Maybe you discovered that you spend a lot on eating out. Instead of being sad that you won’t be able to chow down at your favorite restaurant each week, challenge yourself to make meals that you’ve always wanted to try. It could even be as simple as pausing your gym membership for a few weeks and going on a walk each evening instead.

Don’t forget that every little bit helps

Just as spending $20 here and there adds up over time, so does saving it. You can start small by saving your coins when you pay in cash, or you can opt to make coffee at home instead of stopping at your favorite coffee spot each morning. Even if it’s not much, it’s still better to save it than to spend it.

It’s easy to get overwhelmed when it feels like bills just never stop coming after the holidays, but remember to keep it in perspective. Depending on your situation, there are many ways that you can avoid going into crippling debt. And, while you might feel like you’re the only one going through this, many people have been in your shoes before—and they got through it too, just like you will. Once you reflect on what you can do differently and perfect your budget over time, you won’t have to think twice about those payments in the future.

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