You might have started the holiday season with a budget, but spending can easily get out of hand, especially if you feel pressured to give gifts to people you hadn’t intended to buy for. You can get derailed by courtesy gifts to teachers, babysitters, hair dressers, mailmen, the list goes on and on. Then there are those people who bought you a gift and now you need to reciprocate.
If this sounds like your holiday season and you’re now facing a stack of bills, don’t despair. There are easy ways to get your finances back on track in a month or two.
Ways to Save Money
One strategy for paying down holiday debt is to find ways to save money and funnel those savings onto your credit card. Consider these possibilities:
Tighten your grocery budget. An easy way to find extra money to pay down any residual holiday debt is to tighten your grocery budget. Have a pantry challenge and avoid grocery shopping for a week or two by simply eating up what you already have in your house.
Another idea is to choose simpler meals. Make more bean meals and use ground meat rather than buying steaks or other expensive cuts of meat.
Find cheaper entertainment. For a time, forego your weekly date night. You’ll save money by not hiring a babysitter and not paying for entertainment. However, that doesn’t mean you still can’t have fun. Find free events around town to do with the kids. Have date night at home after the kids have gone to bed. Borrow a movie from the library for free for family movie night. Play a card game on the weekend with your family. Invite friends over for a game night. There are many, many things you can do for entertainment that don’t cost a lot of money.
Give up luxuries. If you must have a soda from the vending machine at work or must have Starbuck’s on your way to work, consider temporarily suspending these purchases. If you go out to lunch regularly, start brown bagging instead. You’ll likely be surprised how much money you save with these simple changes.
Pay with cash only. Sure, using credit cards is convenient, but “scientific studies have shown that people are more likely to complete a purchase if they intend to pay with a credit card than if they intend to pay with cash. Cash just seems more scarce, so people are more likely to try to conserve it. Credit cards don’t produce the same kind of psychological barrier” (Forbes). Of course, you don’t have to forego credit cards forever. Just pay with cash until you’re out of the holiday financial hole.
Only carry large bills. If you’ve switched to cash only, the next step is to only carry large bills in your wallet or purse. Spending $2 on a bag of chips is easy if you’re paying with one dollar bills. If you only have a $50 bill in your wallet, though, you’re more likely not to make the purchase because most of us don’t like breaking large bills for small purchases. (Carry this a step further and only carry a $100 bill, which most retails are unable to break for small purchases.)
Ways to Make More Money
In addition to saving money, you’ll get out of debt faster if you find ways to make extra money to put on the debt.
Return items. If you bought too much this holiday season, you may even still have unused items with the tags still attached. Return everything you can find that is new, with tag still attached. You can replace these items later when you’re not in debt.
Take on extra work. When I found myself in the position of having to pay down unexpected holiday debt a few years ago, I took on an extra job at work and made $2,000 over 5 months, which was more than enough to pay down the debt.
If extra hours at work aren’t possible, consider freelance work, babysitting, walking dogs, or whatever other odd jobs you can find.
Sell stuff. We all have homes with stuff we no longer use. Round up this stuff and sell it. You can sell on eBay, Craigslist, or local resale groups on Facebook. Or, have a yard sale. Do whatever it takes to unload your extra stuff and make some cash.
Once you get out of debt from this past holiday season, start putting some money away every month for the upcoming holiday season so you don’t go in debt again.
What are your strategies for getting out of holiday debt?