How to Recover After Big Vacation Spending
How much did you plan to spend over the holiday season and how much did you actually spend? The National Retail Federation (NRF) predicts 2021 will prove to be the highest holiday spending season on record, with sales between November and December totaling as much as $ 859 billion. Individual consumers plan to spend almost $ 1,000 on gifts and other vacation expenses.
With many Americans spending more than ever (and with the threat of supply chain issues causing impulse buys and quick payments), you may end this holiday season with more credit card debt than you ever get. planned. How can you get back on track and prepare for a new financial start in the New Year? Is it possible to make a financial recovery after the holidays?
Even if you’ve spent a lot more than planned this holiday season, there’s still a chance to get your finances to the point where 2022 feels like a new financial start. We asked Nationally Renowned Consumer Credit Expert Andrea Woroch to share her top tips for managing post-vacation spending and overcoming vacation debt. Here are his tips on how to recoup vacation expenses by focusing on spending less, earning more, and putting your savings to good use.
Start with a month without spending
âThe best way to reset your budget after the busy and expensive holiday season is to detoxify your spending with a month without spending,â says Woroch. “During this time, make a commitment not to buy anything outside of your needs.” Your needs likely include groceries, shelter, transportation, health care, and monthly bills, and exclude expenses like takeout, movie downloads, new clothes, and app purchases.
A month without spending is one of the best ways to save money fast. Committing to a few weeks with as few purchases as possible can be a great way to put extra cash on a credit card bill or increase an emergency fund.
Some people can even go a month without spending without spending anything, although most of us will have to do some sort of financial transaction, even if it’s as simple as stocking up on milk, eggs or paper. toilet.
âSince there are things you will have to buy no matter what, like groceries and cleaning supplies, try to shop smart and stretch your dollars by researching coupons and comparing prices. . Woroch recommends using budget apps to reduce the cost of everyday shopping.
Cut unnecessary expenses from your budget
A month without spending is also a great way to determine what discretionary spending can be reduced or eliminated from your budget in the long run. âEliminate wasting your budget,â Woroch advises, noting that many people can save money just by looking at their credit card statements and wondering what expenses are no longer necessary.
- Reduce your takeout or grocery bill. After a month of cooking at home, for example, you might decide to definitely cut your take-out budget. Use our list of supermarket money-saving tactics to cut your food budget even further, and consider applying for one of the best grocery store credit cards to earn cash or rewards on your food purchases. .
- Cut underused subscriptions. You may also want to consider cutting subscriptions, especially if your budget is currently cluttered with payments to media services and app companies. Don’t want to give up on your favorite shows? Consider a credit card that offers rewards on streaming services, so that you can earn money every time you make a monthly payment.
- Negotiate monthly invoices. Reduce your monthly expenses by negotiating the payment of your bills. “Try to negotiate with cable, Internet, and other monthly service providers, especially if you find a better competitive rate.”
- Compare the prices. âIf you haven’t compared your auto insurance in a few years, do a quick research on the insurance markets,â suggests Woroch. By learning what other options are available, you’ll be able to gauge if you’re overpaying and if it’s time to move on to something more affordable.
Earn extra money fast
Once you’ve adjusted your budget and started saving money, you can focus on making more money, through apps, related activities, and other services you can manage from home.
âReplenish your savings and pay off debt faster by increasing your cash flow,â advises Woroch. Whether you are starting your own small business or going into a side business, there are lucrative opportunities.
âThere are easy ways to earn a little extra cash right from home and in your spare time. Surveys and focus groups, for example, are great ways to earn extra money. In fact, Woroch recently won a $ 150 gift card by participating in a travel discussion group. If you want to improve your cash flow with surveys and focus groups, start with our list of the best survey sites for making money.
Transfer your credit card balances
What’s the last step you can take to get your finances back on track? Consolidate any overdue credit card debt to a balance transfer credit card.
âIf you have vacation debt on multiple accounts, you can consolidate those balances and save on interest by getting an introductory 0% APR balance transfer card,â says Woroch.
Balance transfers are one of the best ways to eliminate vacation debt, with the best balance transfer credit cards giving you 12-21 months interest-free on balance transfers. âYou can pay off your balances without any of your payments being wasted on interest,â says Woroch.
The bottom line
Your post-vacation financial recovery works best when you combine money-saving tools with other good financial practices, such as earning extra income and consolidating old debt. Consider a month without spending to help you recalibrate your spending habits and save money fast. Take a break from spending to re-evaluate your spending to see if there’s anything you can cut back, and consider boosting your income with a side business or new business. While you’re getting your finances in shape, you could benefit from a credit card with balance transfer so you can consolidate your outstanding debts and pay them off without additional interest for a limited time.