The holiday season can be a financially stressful time for many. During the holidays, many of us spend an excessive amount on gifts, travel, food and more. According to Money Digest, there was a significant increase in holiday spending after the pandemic. Americans are anticipated to spend an average of $975 on holiday related gift items alone.
Now that the holidays are over, we may be realizing just how much we have spent. Below are ways to recover from your holiday spending without becoming delinquent.
- Assess the damage
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- Review your finances: Take a detailed look at your bank and credit card statements to understand how much you spent during the holidays.
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- Calculate total debt: If you used credit cards or buy now, pay later accounts (BNPL), calculate the total amount of holiday-related debt you need to pay off.
- Adjust your budget
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- Create a post-holiday budget: Revise your budget to prioritize debt repayment and reduce non-essential spending.
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- Cut unnecessary expenses: Identify areas where you can temporarily cut back, such as dining out, subscriptions or entertainment, to free up funds for debt repayment.
- Prioritize debt repayment
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- Use the snowball or avalanche method: Choose a debt repayment strategy that works best for you. The snowball method focuses on paying off the smallest debt first, while the avalanche method targets the highest-interest debt.
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- Make extra payments: If possible, make extra payments on your debts to pay them off faster and reduce interest charges.
- Earn extra income
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- Start a side hustle: Consider picking up a part-time job or side gig to generate additional income that can be directed towards debt repayment.
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- Sell unused items: Declutter your home and sell items you no longer need either online or through a garage sale.
- Seek professional help if needed
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- Consult with a HUD approved housing counselor: Habitat Orlando & Osceola’s Housing Counseling program is dedicated to offering assistance in financial management and budget counseling to provide you with the support you need. Please fill out the interest form here to get connected with our certified Housing Counseling team.
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- Habitat U classes: Attend a Habitat U Financial literacy class to learn tips and tools to re-organize your finances, reduce debt and increase savings.
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