How to get your finances back on track after Christmas
Ah Christmas – we all look forward to it for so long and then it’s gone in a flash. It’s the most festive season of the year and it’s also without doubt the most expensive. After all, most of us want to make it perfect for our family and friends by celebrating and sharing gifts at Christmas time.
But many of us have probably been guilty of overindulging this festive season, and the budget may have copped a fair old hammering. If that sounds like you right now, it’s time to kick some financial planning and money management strategies into high gear.
In this weeks’ post-Christmas blog, we tell you how to get your finances back on track after all of those festive expenses.
Evaluate your Christmas expenses
You already know you’ve gone a little overboard on your shopping spree last Christmas. But what you need to evaluate now is how much of a toll it has taken on your budget. So, face this problem head-on and start applying your money management skills by checking your credit card bills and taking note of whatever is left in your bank account. It’s important to understand if there is a shortfall so you can develop a plan to manage it.
Clear your credit card balances
According to statistics from the Salvation Army, Australians seeking support from its’ Moneycare program had an' average credit card debt of $14,000. If yours is heading in that vicinity after your Christmas spending and you can't pay it off as soon as possible, this problem will magnify into a much bigger issue. If you have the cash put away somewhere, use it to pay off your balance so you don’t get hit with credit card interest charges.
Develop a repayment plan
Sometimes, paying off your entire credit card balance simply isn’t feasible, and some of us are probably guilty of spending across multiple cards, making matters even worse. While listing your Christmas debts, take note of your credit cards from those with the highest interest rates. Paying these off first will help you quickly lessen your total debts. However, for better financial planning, and if this strategy doesn’t work for you, there are a few other things you can do:
- Find a credit card balance transfer deal with 0% interest rate and move all your credit card debts to a single credit card. This strategy could give you 2 years or more to repay what you owe and eliminate the extra cost, helping you get back on track sooner than expected.
- You can consolidate all your credit card debt with a debt management plan, such as Safe Debt Management's Pay-in-One program. It will combine all of your credit card debts into just one affordable regular payment. See this article for more options on credit card debt consolidation.
Most importantly, if you are paying off your credit card, don’t use your card for any additional purchases – you’ll just end up paying more and more interest, making it harder to clear that annoying balance.
Tighten your belt
Now that we have a plan for your credit card debt, it’s time to apply your best money management skills to help you execute it and get you back on track. Start with the tactic that’s easiest to say but maybe the hardest to do – tightening your belt. After the festivities, revisit your monthly budget against your monthly expenses. List them down according to priorities – housing, bills, food, groceries, etc. Avoid unnecessary costs, such as dining out, buying coffee from the coffee shop, or buying new clothes that aren’t strictly necessary. In other words, try to follow a more frugal lifestyle, at least until you get your finances back on track. That old adage of looking after the cents and the dollars will look after themselves certainly still rings true!
Find an extra source of income
So maybe you’ve already done it all – financial planning, strict budgeting, and belt-tightening. But your cash flow is still in dire straits. Then it’s time to be more creative and find an extra source of income. There are many ways to do that:
- Find a second job online, like writing, answering surveys, or doing some data entry, etc.
- Sell your old stuff online or have a garage sale
- Get a part-time job, like driving for Uber, dog walking or babysitting
Start your budget-planning for next Christmas now
After feeling the impact of all that spending last Christmas, you should have a clearer idea of how much you are most likely to fork out for the next one. So, if you don’t want to go overboard again on your finances, it's never too early to start planning for next Christmas. Here are a few tips to make it happen:
- Put a small amount into a separate Christmas savings account regularly. Even if it’s only $15 or $20 a week, you’ll be surprised at how much it will help you when the holiday season comes around again
- Save your supermarket and airline reward points and redeem them for groceries or Christmas gifts later in the year
- Take advantage of sales throughout the year so you can start buying gifts at bargain-basement prices
Get your finances back on track!
It’s hard to avoid spending more than you expected to over Christmas. If your finances need a jumpstart now, we’re here to help. Just take a look at our cash loans up to $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours – so you don’t have to start out the new year feeling anxious about money.