How to Get Over Your Holiday Spending “Hangover”

We all know the feeling of waking up dazed and bleary-eyed after a wild month of holiday spending. When the hustle and bustle of the season is over—all the presents opened, all the halls un-decked—looking back at your financial statements can be a bit of a shock. In the same way a month of overindulging on Christmas cookies and eggnog can leave your pants feeling a little tight, a season of overspending can make your budget tight too.

But never fear! Bouncing back from your holiday spending spree is as simple as following these 5 easy steps:

1. Assess what you spent.

The new year is an opportunity to turn over a new leaf, get back on track, and take a clear-eyed look at how much you spent the previous month. Look at your bank and credit card statements and make a spreadsheet of how much you splurged, what you owe, payment due dates, minimum payment amounts, and interest rates. Consider the timeframe in which you’d like to pay down your debt and any other financial goals you may have for the year.

2. Rethink your budget.

If the temptation to drown your pandemic holiday blues in unscrupulous online shopping got the better of you, don’t panic. Once you have an idea of how much you spent, you can put together a plan of action. Reassess your budget to dedicate extra funds to holiday-related expenses, especially those made on credit cards with high interest rates.

3. Make a payment strategy.

Tackling holiday debt is as much a psychological exercise as a financial one. If addressing all of your holiday expenses at once is too overwhelming, consider paying down your smallest balance first. That way, you’ll see the fruits of your efforts more immediately and feel encouraged by your progress.

4. Use New Year’s resources wisely.

Although it’s certainly tempting to spend holiday bonuses and tax returns frivolously, you’ll thank yourself for exercising prudence. Put the extra income toward holiday debts or, if your accounts are current, put them toward next year’s holiday expenses.

5. Start planning for next year.

Give yourself the gift of holiday savings. Set up a holiday shopping budget and set aside a certain amount of money toward it each month. Even a small amount, saved regularly, could add up to a big chunk of your holiday spending for next year.