10 tips to help you recover from holiday spending

Ostanina Anna // Shutterstock If your planned holiday budget now seems like a quaint–and unrealistic–memory, you’re not alone. With well-honored traditions of gift giving, festivities and holiday travel, the urge to splurge is understandable. In fact, in a recent Experian holiday spending survey, nearly two-thirds of respondents said they believe they spend too much during the holidays. Unfortunately, you may still be dealing with the financial aftermath well after you’ve packed away your holiday decorations and set your intentions for the new year. To get back on track once the holidays are past, Experian shares 10 ways to help trim back spending, bring in extra cash and shape up your finances for the year ahead. 1. Set Clear Goals You may be feeling the holiday hangover when you look at your finances as we enter the new year, but the first step to getting back where you want to be is to set new financial goals. Start by taking inventory of your financial situation. For example, track your spending over the past few months and compare it to your income to check if you’re currently spending within your means. Next, take a look at your savings account. Ideally, you should have an emergency fund to cover at least three to six months’ worth of basic expenses. If you don’t yet have that saved (or if the past couple months left you eating into your savings), calculate how much you need to save. Then, you can use the steps below to work toward that goal. Last, take note of any debt that you accrued over the holidays. Once you know what you owe, you can work on a debt payoff strategy. 2. Create a Budget If you don’t have one yet, making a budget is a great step toward sorting out the aftermath of holiday spending. A budget is a plan for how you’ll put your resources toward affording expenses, saving for the future and paying off debt. To create a budget, first determine your monthly net income and tally up your basic expenses, such as rent and utilities. Then, set realistic targets for how much you’ll spend on groceries, transportation, retail and other variable expenses. Aim to tweak your spending goals so that you’re able to put at least 20% of your income directly into savings. You can automate your savings so that you pay yourself first without thinking about it each payday. Consider using a budget method to help you structure your spending, such as the 50/30/20 budget rule. You can also use budgeting apps to make tracking your spending and sticking to your plan easier. 3. Cash In a Few Vacation Days Taking some time off is a great way to recharge and connect with loved ones. But if you have extra vacation time you don’t anticipate using, you may be able to convert that time off to cash. Some companies offer time off conversion programs that allow workers to receive payouts for the value of unused vacation days. Check your company’s policies to see if this option might be available to you. If it is, that extra inflow could go toward replenishing your savings or paying off debt. 4. Rent Out Your Car If you have an extra car in good condition, you may be able to rent it out on a carsharing platform like Turo or Getaround. Although you’ll have to clean and maintain your vehicle (check out the guidelines on each site), you can set your own availability and pricing. Just be sure to check with your insurance provider to see if renting out your car affects your coverage. Also contact your auto lender, if you’re financing your car. In some cases, renting your car out could be a violation of your lending agreement. Don’t have a car? You may be able to rent out your empty garage space on Neighbor or Spacer. 5. Get a Side Gig Thanks to the gig economy, it’s now easier than ever to find a side hustle to help pay down debt. Here are some ideas for how to make money on the side: Drive for DoorDash, Uber or Lyft Find a temporary job on Indeed or ZipRecruiter Get freelance work on sites like Upwork and Fiverr Look for odd jobs on TaskRabbit or Thumbtack Sign up for babysitting on Care.com or pet sitting on DogVacay Doing side work doesn’t have to be tedious. In fact, it can be a great outlet for outside interests. Connect with your inner educator by doing some tutoring or get some aggression out by doing a few hours of demolition work–all while paying off holiday debt. 6. Sell Things You Don’t Need While most of us have small items like clothing or shoes we can sell on Poshmark or eBay, many also have larger items–cars, bicycles, patio furniture, or computers–that could be making cash and freeing up space. Stop tripping over that workout equipment in your garage and help it find a new life, gathering dust in someone else’s home, while you enjoy the extra cash. Facebook Marketplace, OfferUp, and other sites that focus on local sales could help. 7. Consider a No-Spend Challenge A no-spend challenge is when you commit to making no discretionary purchases for a set period of time. For instance, you could try a week of no spending. Some people even go as far as to try for a month-long no-spend challenge, but starting smaller can increase your chances of success. While difficult by design, no-spend challenges can help you make up for a period of holiday splurging. You could pair a no-spend challenge with a goal to eat through your pantry or plan free activities to avoid caving in and spending. 8. Renegotiate Your Monthly Bills It’s easy to put monthly bills on autopilot–literally, if you set up automatic payments. But many of those bills may be worth a second look. Renegotiating bills from your cable provider, mobile phone company, home security vendor, and others could save you money, especially if it’s been a while since you signed up. The downside: Contacting these companies personally is time-consuming and easy to put off until a more convenient time (or never).  9. Consider a Debt Consolidation Loan If you’re carrying high-interest credit card debt, interest charges can make it difficult to pay down your balance. You may be able to consolidate your debt to make paying it off more efficient and affordable. A debt consolidation loan is a personal loan that you can use to pay down or pay off your credit card debt. Debt consolidation loans typically have lower fixed interest rates than variable-rate credit cards. And because they’re installment loans, you get a fixed monthly payment and a finite loan term: When the loan is finished, your debt is gone. Having good credit can help you get approved for a consolidation loan with a low interest rate. If your score needs improvement, you may not qualify for a personal loan with favorable terms. 10. Prepare for the Next Holiday Season You just survived this holiday season–you’re hardly ready to go out and start the cycle all over again, right? But spreading the joy of holiday spending out over the year can have real financial benefits, including more manageable spending, less debt, fewer supply chain and gift shortage issues, and less stress. While it may be too ambitious to try to finish your holiday shopping by March, it’s never too soon to start planning. Take advantage of sales for gift items and holiday décor you know you’re going to need in December. Consider a sinking fund: By setting aside a bit of cash every month, you’ll have a pool of money to spend in time for Black Friday and Cyber Monday sales. The Bottom Line Ideally, a few months of belt-tightening, creative fundraising and budgetary discipline will put you back on track financially. If you can, use your post-holiday shape-up to inspire a full year of financial fitness. Pay down debt and keep your credit in good shape. It’s far easier to pay for the holidays and create a payoff plan when your credit starts the season in a good place. Don’t forget to monitor your credit to protect against holiday (and year-round) identity theft. Cultivating good money habits can pay dividends at holiday time and throughout the year. Stick to a budget, eliminate money wasters and build up your savings. These everyday practices can make the next holiday season even more festive by creating room for extra spending without ramping up extra stress, and make your holiday recovery easier when the new year begins. This story was produced by Experian and reviewed and distributed by Stacker.