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How to Recover After Holiday Spending
Dec 15, 2020
We’ve all done it. The holidays tempt even the most thrifty among us to overspend. Plus, with an ongoing pandemic and stay-at-home orders (or at least, recommendations) in effect, many of us have relied a bit too heavily on the “entertainment” of online shopping.
So what do you do now? If you’ve gone a little crazy with the credit cards lately, take these steps toward recovery as we move into next month.
Open those statements.
As much as you dread it, you can’t hide from the inevitable. Open those statements, take note of the payment due dates, and mark them on your calendar. Missed payments and late fees will only make things worse.
Identify areas where you can save.
Can you suspend a few services or dump a subscription for the next few months? Maybe you can challenge yourself to stop eating out until you’ve caught up on credit card bills? Identify areas that you can save money, at least temporarily.
Pay off the highest interest card first.
If you used store cards with high interest rates, pay those off first. Then work your way down to the lower-rate cards.
Don’t focus on rewards.
Yes, you might have earned a ten-dollar-off coupon as a reward for shopping throughout December, but using it only means returning to that store’s website. And are you really going to spend only ten dollars? Probably not, so let the rewards go for now. They really only serve as a way to lure you into spending more money, and that’s the last thing you need to do.
Don’t panic and close your credit cards.
It sounds like a smart move; after all, closing them means you can’t use them anymore, right? But closing cards can hurt your credit score, so resist the urge. Instead, stash most credit cards in a secure place at home.
Consolidate or transfer.
If you’ve really gone overboard this holiday season, look into consolidation loans or balance transfers. If you have a good credit score, you can probably snag a card with a zero percent introductory rate on balance transfers (although you might be subject to a small fee). Moving your debt to one place, and then managing one monthly payment, can simplify things and reduce the time it takes to pay it all off.
If you need help with any other part of your financial plan, give us a call. We can help you evaluate both your short- and long-term plans, budget, and prepare for retirement wisely.
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