As the holidays come and go, you may notice that your wallet feels thinner than usual or that you’re up to your neck in bills. Although the holidays can be a joyful time, they can also put a damper on your finances. This post-holiday finance distress can be something you try to run away from, or it could be something you face head on. Dealing with the aftermath of your poor financial decisions can be difficult, stressful, and time consuming; however, it’s better to deal with it sooner rather than later if you plan to make a full recovery. Knowing where to start when it comes to facing your finances can also be a challenge. Here are a few steps to make sure you get on the right track to financial recovery.
Assess your current financial situation
Once you get the courage to face your post-holiday financial consequences, it’s important that you remember to start slow. Although you may feel rushed to get your finances in order as soon as possible, taking time to thoroughly go through your finances will benefit you the most in the end. For example, if you pay your bills in a hurry, you may end up making a mistake and either pay the wrong amount or you might forget to pay a bill altogether. Even though it’s important to address your financial crisis right away, getting things back in order will probably take more time than you think.
The first step on the road to financial recovery is assessing your financial situation. This can include going over your current debt, how much money you have in your checking and savings accounts, what your monthly budget is, how much you spent over the holidays, how much you received during the holidays, how many credit cards you are using, etc. understanding your current financial situation will help you figure out how much damage there is and how much time it might take to recover.
Explore your options
Once you finish assessing your current financial standing, then your next move should be to explore your financial recovery options. This step all depends on what type of financial crisis you are in. For instance, if some of your financial decisions over the holidays have left you dealing with a low credit score, hiring a professional credit repair service may be your best option. If you are facing overwhelming debt, then seeking help from a debt consolidation service or a financial adviser might be a good option. Whatever your financial circumstance, it’s important to do your research and explore all options in order to make your life easier as you work your way to financial recovery. Keep in mind that you’re not the only one who is struggling with finances after the holidays. Realizing that you’re not alone might help lessen your post-holiday stress and lift your current financial confidence.
Create a plan and stick to it
Creating an action plan can feel like yet another obstacle; however, it is necessary if you want to get on the right path to financial recovery. To successfully handle your finances throughout the year, it is recommended to create a budget in January, right after the current holiday season. Making a budget in January will allow you to stay ahead of bills and expenses and motivate you to make fewer non-essential purchases. Although having a set budget is important, regularly checking your credit report is also necessary in order to stay on top of your finances. One of the biggest mistakes that people make is when they fail to regularly check their credit reports. The lack of checking your credit report, especially after the holidays, can cause major harm because you won’t be able to catch inaccurate charges or fraudulent activity as easily.
Start saving for next year
Saving for next year’s holiday season might seem overly cautious, but it will be worth the time and effort. Besides relieving some stress from your finances during the holidays, saving early will allow you to create a holiday expense budget and will help you know what kind of gifts you can purchase. A good time to start saving for the next holiday is right after the current holiday season ends. Once the holidays are over, all holiday decorations and other holiday-related items go on sale. You can either wait until the next holiday season approaches to buy these items for full-price or you could make some extra room in storage and purchase holiday items on sale immediately after the holidays. Purchasing things on sale in January or February will allow you to save money and help you stick to your holiday expense budget.
After the holiday season ends, it’s also a good idea to write down a list of everyone you bought gifts for and what you gave them. Then, calculate what you should actually be spending on gifts for these people in order to avoid a financial disaster after the next holiday season. Keep this list in a safe place and refer to it the next time you are looking to purchase holiday gifts. This list will help you know how much you should save for next year.
Develop healthy financial habits
One of the most important things you can do during your post-holiday financial recovery is to develop healthy money habits to ensure long-term stability. Although other solutions, like creating a budget and saving, are essential for your short-term financial recovery, they are just your first baby steps towards long-term financial health. Forming good habits like regularly checking your credit report, managing your credit and debit cards wisely, paying bills on time, and making rational purchases will be your best chance at avoiding future financial distress.
Don’t let finances ruin your holiday
Being aware of your finances is important, but it shouldn’t ruin your holiday season. Although it’s good to remember that you can get a second chance when it comes to your credit and finances, it’s best to avoid financial missteps in the first place. If you follow these steps, make wise financial decisions, and prepare for next year, then you will be able to truly enjoy the holidays to come. If you have any questions, let us know.