Sure, the holidays were a lot of fun. You ate great food, spent time with family, and you gave and received some fabulous gifts. Fast forward a few weeks to mid-January. You just got your credit card statement from December and it’s not pretty. Although the season was grand, your bank account is looking quite anemic. All that giving and celebrating caused your finances to take a major hit. Here are five tips on how to recover from your holiday debt hangover. —By Sheiresa Ngo
Lower expectations. “If you have kids, educate them on your financial situation,” says Penny Ray, a financial expert with Savings.com and blogger for BallersonBudgets.com. Better yet, make all your loved ones aware of your financial status. If you can’t afford to buy a particular gift, let them know. Don’t try to cater to expensive tastes and don’t pretend to have more money than you do.
Pay off your balance. If you used your credit card to make holiday purchases, aim to at least pay off the amount you spent on Christmas gifts sooner rather than later. The longer you take to pay off last year’s bills the more interest you pay this year.
Set limits. Have your friends and family agree to a set spending limit. For example, agree that no one will give gifts above $30.
Don’t give gifts this year. If you really did damage your financial standing last season, you might want to sit this one out. After all, the holidays were never meant to be about material things.