Recovering from Holiday Spending


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Despite starting out with the best of intentions, even the most fiscally responsible consumers can fall victim to holiday overspending. Whether it’s last minute parties, last-minute gifts or last-minute travel expenses that put you over your planned holiday budget, there are ways to help you slowly recover and recoup. We spoke with two experts in the financial services industry to understand what steps consumers can take to help reverse the effects of holiday overspending.

Target credit cards and debt.

“Be sure to target all credit card debt first as your New Year’s resolution!” Chris Sands, VP of oXYGen Financial, Inc., advises. The faster you can pay down your credit card bills and debt, the less you’ll have to pay in interest rates, and the faster you’ll begin to help your credit score.

Be proactive in the New Year.

W. Tyler Montell, of W.B. Montell Financial Services, advises, “In order to mitigate long-term damage, families should be proactive in planning to save in the first quarter of 2014. They should automate savings plans by transferring a portion of each paycheck to a separate money-market account. Scheduling automatic transfers will ensure periodic savings aren’t missed.”

If necessary, return gifts.

“There is also still time to return gifts if you know you have put yourself into debt from your holiday shopping,” Chris Sands notes. Even if you don’t have receipts on hand, you might be able to return items for store credit. Be sure to brush up on the retailer’s return policy beforehand.

Identify savings opportunities.

“Families can create savings opportunities by identifying events in January or February where the family can underspend,” W. Tyler Montell says. “For example, instead of making a weekend trip or dining out for a special occasion, the family can seek a less expensive alternative. By acknowledging and planning these opportunities, they will avoid social conflict from a last-minute change in plans and increase the probability that the money-saving alternative will occur.”

Plan ahead for next year.

To avoid having the same problem next year, Chris Sands recommends being proactive. “Set up a separate bank account to regularly deposit money each month in preparation for next year’s holiday season. Use this cash instead of credit cards next year. You’ll know the account balance, and know that once you exhaust that, that’s it! So you’ll budget your gifts accordingly.”



Briana Fabbri is head of marketing for NetCredit.