So, you overspent on Christmas gifts and now you’ve found yourself in a sticky situation. With credit card bills rolling in, you may be wondering how you’re going to tackle all of them without putting a huge burden on yourself. Don’t worry, if you spent too much on Christmas, you can use the following tips to get back on track.
Pay Highest Interest First
If you’ve been racking up the bills on your credit cards during the holiday season, you’re going to need to tackle those first. Credit cards can be a huge drain on your finances and you end up paying so much more than what you would have spent with cash.
The first thing you’ll need to do is determine which of your credit cards have the highest interest rates. These are the ones you’ll need to start chipping away at first. While you don’t want to neglect your other cards, consider paying less on ones that have lower interest rates or even promotions for a lower interest rate for a set number of months.
It’s a good idea to completely pay off any bills you racked up during the holiday season but also consider working on paying your credit cards completely off. This can set you up for more financial success in the future. Leave one or two cards for emergency reasons.
Lower Other Bills to Free Up Money
Lowering your bills is surprisingly easy and, in many instances, can be as simple as a phone call to the company where the bill comes from. By calling your cell phone company, your electric company, and even your other utilities, you could save a lot of money on your bills! By freeing this money up, you set yourself up for an easier chance at getting caught up on all that holiday spending you did.
Many people don’t even know that they can negotiate the rates of most of their utilities so they just feel stuck in paying the same amount month after month. With just a phone call, you can lower your bill permanently which can leave you with more money even after you’ve cleared up all the debt you have from your holiday spending!
Consolidate If Necessary
Consolidating your debt can be tricky if you don’t know what you’re doing. While it may seem like a good idea to take out a personal loan and just pay your credit card debt off with that, doing so can hurt your finances in the long term. Make sure you know the interest rates of the personal loan and have a solid understanding of all the terms so you don’t end up getting burnt on an even higher interest rate than you were paying for your credit card bills!
While consolidating your debt can have a long-term positive impact on your finances, make sure that you’re doing it the right way instead of jumping into something that may seem like a good offer, but that could really make your debt worse. The best way to make sure you’re getting a good deal on a loan is to get it from a reputable source. Your bank or credit union should be the first place you start when shopping around for this type of loan!
Tighten Up Your Pursestrings
One of the easiest ways you can get back on a budget after overspending on the holidays is simply sticking to a stricter budget for the months following your holiday overspending. Even if you didn’t have a budget before the holidays, now is the perfect time to start.
Do it now and you can set yourself up for financial success for the rest of the year! It’s a good idea to tighten up your budget during that time and buckle down on saving money wherever you can! Consider not eating out at all, skipping on coffee a couple of times a week, and eliminating any unnecessary expenses. These are small changes that can have a big impact on your budget. Use the money you’re saving to get caught up on all your holiday spending bills!
Tip: Grab this Family Budget Workbook to help you get started.
Practice New Habits
If you overspent during Christmas, there’s a good chance you’ll do it again next year or for the next holiday that’s coming up. It’s time to get serious about your spending. While there are some instances where overspending can be a real problem that requires professional help, many other times it comes down to reteaching yourself good spending habits. By doing this, you can set yourself up for success in the future and not ever have to worry about playing catch up like this again!
