Tips to Boost Your Post-Holiday Savings

The holiday season is a magical time with family, friends, and festivities. However, when the celebrations are over, you might realize they took a toll on your wallet.

Overspending on presents, traveling to visit family, and hosting dinners can contribute to a post-holiday financial hangover. However, you can take steps to recover from this slump and get back on track with your financial goals.

The following tips can help boost your post-holiday savings.

Evaluate Your Holiday Spending

Understand exactly where your money went during the holiday season:

• Review your November and December bank and credit card statements.

• Categorize your expenses, such as gifts, meals, travel, and other holiday-related costs.

• Look for patterns and areas where you went over budget, such as last-minute gifts at a higher price or drinks that cost more than anticipated.

• Reflect on what did and didn’t financially work for you.

• Create realistic spending limits and strategies to avoid overspending next year.

Return or Exchange Unused Gifts

Determine which presents you don’t need or won’t use and return them. Even if you don’t receive cash back, you can use a store credit for future purchases.

Tackle Your Holiday Debt

Focus on paying off your credit card to minimize interest. List all your debts and their interest rates, then consider using the snowball method or the avalanche method to pay them off. The snowball method involves paying off your smallest debt first, and the avalanche method involves paying off your highest-interest debt first.   

Rebuild Your Savings

Set a savings goal for the new year:

• Implement a temporary spending freeze on non-essential items, such as dining out and impulse purchases.

• Redirect leftover funds to your savings.

• Set up a recurring transfer from your checking account to your savings after each payday.

Create a Spending Plan

Use the zero-based budgeting approach to create an annual spending plan:

• Evaluate your spending habits and uncover areas for improvement.

• Assign every dollar of income to a purpose, such as expenses, savings, debt repayment, and retirement.

• Use a spreadsheet or budgeting app to track your finances.

*This information is for educational purposes only.