Here's How to Recover From Your Holiday Spending Binge

 Steven Abrams

Holiday spending rose 4.9 percent in 2017, setting a new record for consumer spending, according to the Mastercard SpendingPulse report. This spending comes as the savings rate has reached new lows. While this may be a great indicator of consumer confidence, it may be bad news for our bank accounts. It is easy to overspend during the holidays. Even the most budget-conscious consumers can stray from their spending goals when faced with steep holiday sales, long gift lists and the expectation of generosity during the season.

Recovering from holiday overspending is an important step toward getting your finances back on track. Luckily, there are easy steps you can take to relieve the financial pressure.

Check the damage. When it comes to bills, the last thing you want is a surprise. If you have a feeling that you may have splurged more than you expected, you are better off knowing what's coming, so you can prepare. If you paid anything with cash, get all your receipts together and add them up. With a credit card, you can log onto the card's website or download the app to get your current balance.

Combine all of your credit card balances and cash receipts to see what your total bills will be for your holiday spending. Be sure to include your normal monthly spending along with your extra holiday spending so that you have a complete picture of what you owe.

Make a repayment plan. Having a budget is one of the best ways to save money and get a handle on your spending. Plus, it can help you focus your money to reach goals and pay down debt. Finding the right balance between your income and your spending is key. Once you have your total for your holiday spending, you'll know if you have the savings and income to pay the bills when they come due.

When building your repayment plan, focus on credit cards and loans first to avoid paying interest. If you have to take cash from an emergency fund, make it a priority to get that fund back to a healthy balance. If you can't pay it all down at once, set aside as much of your income as possible every month to apply to the balances due.

Spend less next month. An easy way to recover from overspending one month is to spend less the next month. While you can't avoid paying necessities such as your rent, mortgage or utilities, you can choose to not eat out and to not go on a shopping spree. Having a budget can really help here. If you know exactly how much you make every month, and subtract what you spend on necessities every month, whatever is left over is what you can apply toward your bills. You'd be surprised by how much brown-bagging lunch and skipping your daily coffee can save you every month. That's not to say you can't have fun. Choose a matinee instead of seeing a movie at full price. Depending on how much you overspent, you may need to keep spending less until you've paid off all your holiday shopping.

Returns. If you've spent more than you can afford, an easy way to recover is to make some returns. The presents we buy ourselves are usually the easiest to return. We have the receipts, and there won't be any hurt feelings. If that's not an option, you can try returning gifts that you received for cash or store credits. Apply the cash to your holiday spending bills and use the store credits for necessities that you would need to buy anyway. You can even try selling your gifts for cash on sites such as eBay to earn back some money.

Increase your income. Increasing your income doesn't necessarily mean getting another job. It involves looking for other ways to earn money and applying that money to your debts. If you received a holiday bonus at work, use it to pay off your bills. You can file your taxes early and use your tax refund to pay for your spending. You can try selling clothes you no longer wear online or to a local thrift or consignment store.

You can also consider sites such as TaskRabbit, where people pay for help with everyday tasks, such as moving, cleaning or running errands. If you need a longer-term solution, and you meet the necessary requirements, you can join a ride-hailing company such as Uber or Lyft, where the flexible schedules are a perfect supplement to your full-time job.

Plan for next year. As you work to pay off your holiday spending, make sure to take note of how you got here. If you didn't make a budget, and your bills are a surprise, make a budget and track your spending this year. If you realize you were too generous, spending money on extravagances you can't afford, commit to making a list of gifts that are within your price range. Make a budget and stick to it. If you know you won't be able to pass up on the deals and sales during the holiday season, it is never too early to start saving for next year.

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