Recovering from Holiday Spending: 4 Tips to Get Back on the Savings Track

The following post comes from the Military Saves Blog.  Follow them on Twitter and Facebook.

So you spent a lot of money over the holidays and your savings have been depleted. Now that the holidays have ended, you need a recovery plan. If you’re in the red from holiday spending, it’s time to assess and strategize how you can pay off the debt accrued, and what habits you should form in the New Year.

 

  1. Purchase only the essentials. This is imperative. If you don’t need it, don’t buy it. It’s tempting for people to buy something for themselves after buying gifts for everyone else, but resist the temptation. Also, with more holidays looming, including Valentine’s Day, Mother’s Day and Father’s, it is important to begin budgeting for what you will spend for those holidays now. For example, my sister likes to get Valentine’s Day gifts for the whole family, which amount to a hefty bill since she has three kids, siblings and a mother to buy gifts for. I estimate she’ll be spending at least $10 a person, if not more, so if you will be buying gifts for roughly the same amount of people, start budgeting and saving for it now.
  1. Create a 2014 “wish list” for each month of 2014. If you stumble upon something that is not on your wish list, don’t buy it. You didn’t know it even existed yesterday so why should you buy it today? Unless it’s something you’ve wanted and for over five years and is on 75% off clearance, put it out of your head and go back to buy it later – when you actually have the discretionary income to purchase it. If you give in o your need to buy it, do so only if you can think of something to do without (video rentals, daily latte, etc.), think of buying it until
  1. Practice the same saving techniques that you used during the holidays. If you went without your daily latte for four weeks during the holiday to save money to buy your niece the doll she wanted, consider doing without for another 1-3 months to pay down holiday debt.
  1. Use your tax refund wisely. Instead of blowing your tax refund on a wide screen TV or similar electronic, clothes or shoe spree, pay down some of your holiday debt.

It’s never fun to have to pinch pennies, but once you make a habit of it, it becomes second nature. It’s kind of like dieting well. If takes lots of willpower at first, but after the third week of eating lighter, it’s not so bad. If you use the same method for saving, and look at where you can cut spending in the New Year, you will be off to a good start. 

If being part of a group working toward the same goals also helps you stay on the savings track, you should sign up for America Saves Week today. It’s a great way to start off the New Year!

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