You say you won’t go overboard every year – but once again holiday shopping may have gotten the best of you already. In spite of your best intentions, you overspent, you’re probably full of regret, and you’re getting a headache just thinking about your January credit card statement. Now what?
1. With a sober mind, go through what you bought and return/exchange if it’s not too late.
It’s easy to get so caught up in the moment — the rush of shopping, the allure of good deals and sneaky sales tactics — and you probably made a few impulsive decisions, even if you didn’t overspend.
Shoving the items you felt guilty or embarrassed about to the back of the closet might make you feel better, but the act might also cost you the 30-day return/exchange window — in other words, an opportunity to reverse your losses. If you didn’t give some items as gifts, return them stat.
2. Offset over-budget spending by cutting elsewhere.
If you’re in the red after the holidays, it’s time to offset your spending by cutting a different area of your future budget to accommodate it. Start by totaling what you spent and comparing the total to discretionary spending you’ve budgeted for January 2017. Is there something that matches the exact dollar amount? What about two or three ‘luxuries’ that match one half or one third of what your spent? Cut them. You may only need to cut a service or two for a month before you’re back on track, so it’s really not much of a sacrifice. Consider cutting the following:
- Extra cable channels
- Netflix and other streaming media accounts
- Scheduled hair treatments, massages, or manicures
- Magazine, book club and other subscriptions
Beware: cutting one of these temporarily might show you how little you’ve missed it… and how much nicer it is to have the cash!
3. Pay it back — fast.
If you charged up your credit card(s), the debt you accumulated and the interest attached to it may have even longer side effects than a light bank account. Resolve to pay your shopping debt off entirely within one to three months. If that’s not feasible, try to pay at least three times the minimum amount. Ultimately, aim to keep your balance below 40% of your credit limit so you won’t hurt your credit report.
4. Redeem those freebies.
Many retailers offer cash back in the form of gift cards on special buys through the holiday season or early into the new year, but reports show that many are never used. Don’t let your freebies go to waste – use them to retroactively pay for over-budget spending. If the gift cards aren’t for stores you shop at, go online and sell or exchange them for something you’ll be able to use. Just don’t let them go to waste.
Article Source: Jessica Sommerfield for Moneyning.com