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How to Start Financial Recovery After the Holidays

Thursday, March 01, 2018

Many Canadians find themselves wanting to recover financially after the holidays. In addition to common regrets about overconsuming food and/or alcohol, you may also be facing the financial aftermath of overspending. The pressure to buy presents for others, coupled with major sales that companies use to compete, can easily lead consumers into a downward spiral of major credit card debt.

recovering from holiday spending

Below are some proactive strategies to consider now if you are facing financial difficulties following the holidays. Left unchecked, financial difficulties can otherwise potentially impact relationships at home and work unnecessarily.

  1. Hold Off on Unnecessary Purchases
    After overspending during the holidays, it is important to consciously reduce your spending. Hold off buying any large new items and try giving shopping a rest for now altogether. There are no more expectations, there is unlikely to be much selection available at this time of year, and you need to give yourself time to rest and recover, just like you would need to rest if you incurred a fitness injury.
  2. Decipher Between Wants and Needs
    While trying to rebuild your credit and pay off debt from the holidays, be sure to ask yourself before each purchase whether this is something you need or simply want. Buy only what you need (e.g., food) and stay away from shopping malls and favourite websites you enjoy that may tempt you to spend. Focus on other interests, activities, or classes in which you are already invested, or look into starting new activities (e.g., walking or jogging goals) that are good for you all around, mentally, physically and financially.
  3. Make It Harder to Spend Money
    Reduce your credit card usage by leaving your credit cards at home or putting them in the freezer in a bowl of water if you are too tempted to keep using them on demand. Be sure to pay at least the minimum due on your credit cards when payments are due. By keeping less money available in your chequing or savings account and only allowing yourself to use cash and/or a debit card, you may force yourself to pay for necessary items immediately and make more conscientious decisions when it comes to spending generally.
  4. Track Your Spending
    For everything you need to buy (necessities like groceries, toiletries, and so forth), write those items down in a notebook or type them up in a saved computer file, including the amounts with the taxes added. If you slip up and buy other items, write those down too. Recording literally all of your purchases will help to keep you accountable and mindful of where your money is going.
    You can also check your balances daily or weekly to see how much is coming in and going out in real time. Rather than awaiting credit cards bills that may come as a surprise, this method enables you more control over your financial spending, no interest rates (which are often about 20-22% on credit cards) and, most importantly, you cannot spend money from your savings and chequing accounts that you do not have.
  5. Plan Affordable Future Gifts
    The excitement of giving can continue by planning future gifts. You can make a list of who you will buy for and budget how much you can actually afford to spend. Consider getting gift cards at favoured stores with a set amount aligned with your true budget. If you were overly generous before, cut back and do not feel guilty—remember that your financial health is important too.
    Try having a discussion with friends and family now to put a price limit on future gifts or eliminate gift giving altogether where possible; this can help eliminate the holiday stress you may all experience too.
    You can also get creative with gift-giving in other ways, such as by customizing thoughtful gifts you make instead of buying everything new. Consider preparing a photobook of memories from the year and personalizing frames you can purchase at the crafts store, offer babysitting or sleepover services to your friends and siblings who have children, and exchange home-cooked meals.

Consult Abakhan & Associates’ Licensed Insolvency Trustees

If you have surmounting debt a Licensed Insolvency Trustee can help by assessing your financial situation with a free consultation and providing objective, sound advice. Despite feeling financial challenges right now, your financial stressors need not be long-term. There are a variety of debt solutions available of which you may not be aware of—including debt consolidation, or a consumer proposal. While filing for bankruptcy is typically an option of last resort, getting financial help should be a priority. With offices throughout British Columbia and servicing the Yukon as well, don’t hesitate to contact a professional advisor at Abakhan & Associates at 1-877-308-8877.

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