Oh, holiday season, how we love you. We love the noise, the crowds, the children’s smiles, the shopping. We love it all, and it almost seems that for one short period every year we can spend without worry. Now is the time to be happy, to give happiness—which often involves spending—gift wrap, party, and celebrate the season. We’ll worry about the financial issues next month.
Does this Sound Familiar
While we’re busily distracted by pretty lights, too many of us can get caught up in the whirl of spending and celebrating, and the plastic gets tapped (or swiped) a bit too freely. What are we left with once the music is over? For some, who planned, budgeted, and stuck to a list, life goes on as usual. For others, there’s a mountain of post-holiday bills to get through.
Hangovers Are the Worst
If we’ve veered off budget and relied on credit, the post-season season comes with a big, fat, slamming-in-the-brain, January financial hangover.
Now everyone and their brother has ‘the best’ cure for a regular hangover. which usually involves copious amounts of grease. The financial hangover is a different beast that no amount of bacon and eggs can alleviate. There is a cure, though, and there’s also a lesson (as with all hangovers) for how to avoid it the next time around.
Image source: John Henderson on Flickr
The Best Hangover Cure
Step one: Gather all your bills and add them up. No cheating! Honesty is best and you need to know the nitty-gritty of how and where you spend to find out how bad the finance hangover really is. Include the interest rates in the calculations because those are part of the payment plan.
Step two: Create a realistic payment plan – one you can stick to – and pay down your holiday debt as quickly as possible. Some people like to tackle the smaller amounts first for the satisfaction of crossing off an entire bill. Choose your favourite strategy. For day-to-day living, set a budget, carry only cash, and always plan before you head out shopping anywhere (even the grocery story has its hazards.)
Review Interest Charges
Look at the interest on each bill. Chances are it’s through the roof. Tackle them as quickly as possible because interest rates are relentless and add up fast. Consider transferring the balance to a card with a lower interest rate, or speak to a banker about a line of credit; those generally have lower interest rates, and the payments come right out of your accounts on a regular basis. It’s a less painless way to get back in the green.
Stick With It
Once the debt is paid off, stick to the plan, and continue to put the same amount, on as regular a basis, into a high-interest savings account. As a result, cash will be king next year, instead of the sparkling lure of plastic-magic.
Shakespeare’s famous line, “to thine own self be true,” has never been more important than in January. Help yourself by staying out of the stores and offline during sales. You know what I’m talking about!
January is also a great month to lie low and save money. Choose to eat at home, use up frozen left overs, and ignore the Belgian chocolate, rich bleu cheese, and macadamia nuts lurking in the grocery store aisles.
But One More Thing
Many of if do this (own up!) We buy gifts to have around just in case someone’s been missed. They sit under the tree, until the needles have all fallen away, and then we end up keeping the gift ourselves. Return these orphans. It’s another step to bring finances back on track.
And Now Celebrate
Now you hold the cure to the dreaded January financial hangover. The painful lessons learned in past Januaries will help ensure you’re not in the same boat next holidays. Enjoy the season, watch for finances, spend wisely, and use cash wherever you can. If you do get into debt, there’s a way out.
Image Source: More Good Foundation on Flickr