Christmas on a Budget: Dealing with overspending
Christmas is over and you’re left in the aftermath of a hurricane of wrapping paper, ribbons, baubles and leftovers - and perhaps a little dread at the idea of checking your bank account. If you’ve spent more than you meant to this year, don’t panic! We’ve put together this guide to shoring up your savings and defeating your debt. Give yourself a late gift and get your money matters in order.
Read more: What is debt consolidation?
Overspending during Christmas will have cut into your saving goals, reduced your stashed cash or increased your debts. The first step is to ensure the problem doesn’t get worse. It’s time to cut back on your spending until everything is back on track.
This is the perfect time to revisit your monthly budget. Start by factoring in the additional Christmas costs and adjust your spending accordingly. If you haven’t made a budget for this year yet, Sorted has an excellent budgeting tool to get you started.
And if you’re looking for places to begin some sensible cuts, check out our guide to reducing your bills at the supermarket.
Short of finding more paid work, there’s one easy way to get the cash you need to cover the shortfall: selling some unwanted stuff in the post-Christmas downtime.
Dig through closets, garages and storage. If you haven’t used or worn something in months and aren’t planning to in the near future, it might be time to get rid of it. TradeMe is an easy go-to for items in good enough condition. Scrapyards are great for those that aren’t. And if you can’t sell it or scrap it? Take it to the charity shop and let someone else get some use out of it. You’ll welcome the extra space.
If you’ve put the extra expenditure on your credit card(s), you’ll need to deal with that quickly before the debt piles up. If it’s across multiple cards, there are a few different ways to do this. Some people like to focus on the highest interest card first to cut down their interest repayments. Others prefer to deal with the smallest amount of debt first to feel like they are making progress. Figure out which method is best for you and get started.
Alternatively, it might be worth looking into debt consolidation. This could lower your interest rate and simplify your payment plan at the same time. You can find out more in our guide to debt consolidation.
At this point, your overspending is under control or is on the way there. Now it’s time to consider how to avoid this same problem in the future.
Making a budget specifically for Christmas is a good step. Look at how much you spent this year and use that as a baseline for how much you expect to spend next year. This might seem odd, considering that budget is “overspending”, but the key is to be honest and realistic about how much you’ll spend. It’s better to overestimate and save more than you need than underestimate and come up short again!
Happy holidays from the Avanti Finance team. If you’re looking for more advice on cutting costs at Christmas time, check out our guides to reducing your bills on food, decorations, gifts and activities.
There are over 200,000 single-parent families in New Zealand, and many more with a stay-at-home parent – plenty are living on a single income! Whether this is just for now