The holidays are a season of giving, which means they’re also a season of spending. How else are you going to leave the best presents under the tree? Without Old Saint Nick at your beck and call, that responsibility falls solely on your shoulders.
After swiping your card and signing your name along the dotted line all December long, it’s easy to fall into a habit of spending that follows you long after the holidays are over. If you’re worried about the long-lasting impact the holidays have on your finances, check in with this guide to getting out of the holiday spending lifestyle.
1. Track your spending
It’s easy to focus on the big things that tip your budget into the red. Things like the Nintendo Switch you gave your kids or the iPhone XS Max you wrapped up for your partner take a larger chunk of cash
But once the holidays are over, it’s unlikely you’ll continue to buy these big-ticket items. Smaller purchases, on the other hand, are a cause for concern. Dropping your change into a parking meter, ordering a fancy latte, or getting a treat from the break room vending machine — they’re the little things that can make up your regular day-to-day spending.
With most of these coming in at less than $10, things like a caffeinated treat or chocolate bar are easy to overlook. But they add up! Together, their combined totals could rival the most expensive gifts from the holidays.
If you aren’t paying attention, you can forget how much you’ve spent. It’s not until the end of the month, when you’re unable to pay your utility bills without a payday loan, that you realize just how much you’ve spent.
By tracking your expenses, a budget helps keep you accountable for every dollar coming in and out of your hands. You can see how much you’ve spent at any given time, so you’re more likely to stop yourself from shopping when you’re nearing your spending limits.
2. Find savings in your budget
Once you start tracking your expenses, you’ll start to get a good idea of your deepest, darkest spending secrets. Some of them, like a daily latte purchased before each work day, are the little things threatening your budget. Others are less obvious leeches of your cash.
Housing costs, utilities, insurance, and online loan payments are common expenses in the typical budget. Most people think of these expenses as constants in their budget or as things that are nearly impossible to change.
This common misconception stops people from finding other ways to save in their day-to-day life. In reality, even these regular expenses offer opportunities to save.
Take, for example, your utility bills. An online lender like MoneyKey shows it’s possible to reduce what you pay by managing your daily energy usage. In addition to facilitating online loans, they share simple ways to save money, like turning your thermostat down while you leave for work or repairing the weatherstripping around windows to prevent heat leakages.
3. Lock up your credit cards
Like online loans, the credit cards in your wallet have a time and place. They make it possible for you to purchase big ticket items that you need, even when you don’t have the physical cash. They’re also a safe way to shop online when your local stores don’t have what you need.
Unfortunately, they’re also an easy way to overextend your budget if you think of your credit as a never-ending resource.
Remember, a credit card is similar to a personal loan in that you have to pay back every dollar you tapped or swiped away, plus interest. If you use your credit card when you have no means to repay it, you throw your budget out of balance. You may end up carrying this debt for months, accruing additional interest on top of every purchase.
If you used your credit card throughout the holidays, use any savings you’ve gathered to pay off your balance. The faster you pay it down, the less you’ll end up owing. But don’t worry if you can’t pay off your entire balance right away. Just make sure you pay the minimum balance to avoid any late penalties.
Recovering from the holidays can be a challenge. It’s a month (or more!) spent eating all the things you want, drinking all the cocktails you like, and — let’s not forget — spending as much money as it takes to keep everything merry and bright.
If you think you might be addicted to the spending lifestyle of the holidays, make your finances a priority in the new year. These tips plus hard work will pay off in the form of fewer debts and bigger savings. More importantly, you won’t be tempted to spend all your expendable cash on things you don’t need.