You just got back from your two-week vacation. You are telling your friends and family how wonderful it was: the water was crystal clear, the sky bright blue and you enjoyed every single minute you spent on the beach. And the memories are so vivid, filling your lungs with air and your heart with warmth.
But then you get back home and start analyzing your finances. You don’t like what you see – the account balances are so low and your wallet is not as thick as you would like it to be. Well, my friend, welcome to the post-vacation financial nightmare!
Everyone has experienced this at least once in their lives. When you are on vacation, you are relaxed, which means that you spend more money than you would back home. And now you are almost broke and too proud to ask anyone for help.
To help you get out of this financial distress, we have come up with a list of eight ways to help you financially recover from vacation.
Know where you are
This is an extremely important step and the best way to start your journey to financial recovery, though it requires some courage and time. Taking time to go through your finances in detail will give the best results in the end. Even though you may be impatient to get back on the horse right away, this will probably take some time and it is best not to hurry. After all, he who hurries, his footsteps errs.
Before you do anything else, try to assess your overall financial situation. This includes your monthly budget, as well as your short and long-term financial goals. Create a list of all your debts, payment due dates, minimum payment amounts, interest rates, and so on.
Checking your current debt, your account balances, budget, spending and other aspects is an essential part of improving your finances. When you understand each of these aspects completely, you will have a much better starting point and the idea what to do in the long run.
Create a budget
Once you understand your financial situation, you need to create a detailed budget. This is another crucial step on your journey to financial recovery. And you shouldn’t wait a long time to do this. As the matter of fact, you should do it right after you assess your financial situation. Making a financial plan will enable you to stay ahead of all your bills and expenses and hopefully keep you from buying things on impulse.
It is very simple – when you create a budget, you actually set financial goals and when you stick to your budget, you are much more likely to achieve those goals. The goals should pertain to your expenses, savings, assets, expected income, etc.
If you are really struggling, you will need to set up a bare-bones budget. This will make you spend money only on food and bills. But such a budget means that you should save on these as well. You can do this by planning for leftovers and eating them for lunch the next day. This strategy will help you save even more money.
However, even though you have a budget, you cannot expect to stick to it one hundred percent. There are always some unexpected expenses which need to be covered. However, unexpected expenses are not something that should discourage you as they regularly happen to all people. But it is important to know this and have some extra money to cover them when they occur.
To cover unexpected costs with ease, you need to have some money on the side. Start saving as soon as you can because you can’t predict unexpected costs, which is very logical when you think of it.
Create an emergency fund as soon as possible. For this, you will need a month or two, but it will help you pay off your credit card debt and cover real emergencies such as car repairs or losing your job.
In addition, saving money will enable you to have more money for your next holiday and avoid getting into debt. You need to be proactive if you want to get the best out of your holiday without hurting your finances. If you manage to put away $100 a month, you will have $1000 in 10 months, which is quite a lot if you don’t want to stay in luxurious hotels.
Write down what you need for your next vacation and calculate how much money you need to afford all of that. This list will help you understand how much money you actually need and avoid financial disaster next year.
Find out about all your options
The word ‘options’ here refers to options in different areas of your life. First, you need to explore the options you have on your path to financial recovery. This includes getting the best credit card, consolidating your debt, taking out a loan, and many other steps.
In addition, you can ask for professional help to repair your credit or contact a financial adviser to give you an insight into the best financial practices.
Whatever problem you are facing, it is essential that you explore all your options. This will open a great number of possibilities for you and show you some things that you would not be able to see otherwise.
Moreover, try searching for the best options for your vacation next year. This includes flight and accommodation, which can cost you a lot of money if you don’t explore all your options. For example, using your credit card rewards to pay for your vacation will take a big financial burden off your back.
Now, this is a step that you may not like at all. However, it is necessary to cut down on your expenses if you really want to improve your finances. Going on a financial diet and trying not to spend on unnecessary things is a very effective way to get back on your feet. After all, frivolous spending is what got you here in the first place.
There are a number of ways to stop overspending:
- Cut back on your daily expenses.
To do this, you can carpool to work, make coffee at home, bring your lunch to work, switch to reusable water bottles, do your own nails instead of going to the salon, etc. It is amazing how much money you can save by doing all these things for a whole year.
- Review your monthly expenses.
This pertains to cable and cell phone bills. You may be paying more money to your provider and getting a service which is worse than the one offered by another provider. Do some research on the web and make sure you change your providers if you are not getting the best value for your money.
This is a pun, of course. Take a look at the local leisure activities which are free of charge. Instead of going to the gym or restaurant, you can go hiking or take your children to a free art exhibit. In addition, you can organize a potluck dinner in your neighborhood or enroll in a free course at your local community center.
There are so many great free activities that you can enjoy and save your money. You just need to take some time to explore them.
Be careful when shopping
To save money on shopping, you need to create a plan and stick to it. Here are some important tips that can help you save a lot of money at the supermarket.
Open your refrigerator, cabinets and every other place where you keep your food. See what’s missing and make a list of things you actually need. Then, at the supermarket, stick to the list and you will save money.
When you buy items in bulk, you can buy them at lower prices. If you need items in large quantities, include them in your shopping list and separate them into smaller piles when you return from the supermarket.
Buying discounted items can save you loads of cash. They are generally found in special places in the supermarket, for example, at the beginning of each aisle.
Why would you buy a more expensive branded product if you can choose a cheaper generic item of the same quality? Of course, if you don’t trust new brands, choose your favorite and expensive one. But most of the time, the difference in quality is hardly noticeable and you only pay for the brand name. Don’t be a snob and fall for these tricks, you know better than that.
- Do your shopping less often.
When you shop less often, you will learn how to use all the food in your fridge before going to the supermarket next time. You can probably manage to live for two weeks with the food you bought during one big supermarket shopping and a few smaller ones in between.
When you pay with a credit or debit card, you spend more money. When you have a limited amount of bills in your wallet, you won’t be able to overspend and buy unnecessary items.
Eat the food you prepare
From time to time, everyone should go to a restaurant and order their favorite meal from their favorite chef. However, doing this every day would probably take your finances downhill to the point of no return. In addition to restaurants, you should also avoid bakeries, fast food stands and other places for eating out.
To better control the money you spend on food, prepare your food at home. Apart from being cheaper, it will also be healthier than something you would buy at a bakery or fast food stand.
Plan your meals. Take a list of your favorite dishes, see what ingredients you need to prepare them and how much of them you need. This will make you spend less money and eat healthy food.
Reevaluate your credit cards
Do you know how many credit cards you have at the moment? Which one has the highest APR and which one the best terms?
Be wise about using your credit cards. Eliminate those with annual fees and a high APR and make sure you use those with the best rewards system. Take advantage of the points you earn when making purchases with these cards and put them towards funding your next year’s vacation.
Also, you can search for new credit cards with better terms than your existing ones. Credit cards are rather complicated to manage, but they can be great if you know how to use them properly.
Those were eight effective ways to improve your finances after vacation. You went to your dream destination and enjoyed your time there, but now you should try to be honest with yourself and get your finances back on track.
Persistence is the key to your problems. Yes, it will take you time to improve your financial situation, but you should know by now that earning money usually takes more time than spending it. Go step by step and make sure you do your best to complete every step on this journey to financial recovery.
Some of the steps will be more difficult than others, and this is why it is important to stay persistent and stick to your plan. Following the steps that we listed will help you make smart financial decisions and get out of financial mess.
But whatever you do, don’t let your finances destroy your memories of the great time you spent on your vacation. After all, the fact that you chose to spend money on vacation means that you value experiences more than material possessions. Don’t associate your financial hardship with your memories of vacation even though it is a direct consequence.
And remember – this is a great lesson for you. Next year, when you come back from vacation after a year of making smart financial decisions, you will find that your finances are way better than at the same time last year.