The monthly statements are coming in, but that doesn’t mean it’s time to panic if you went a little over budget during the holidays. Experts offer five tips on how you can get your budget back on track.
Know where you are
Look at those post-holiday credit card statements, while also considering your usual monthly bills like rent and utility payments. “You want to make sure that you make at least the minimum payments on all of the credit cards, and then if there’s extra money, then you want to try to allocate that to the higher-rate credit cards,” says Howard R. Pressman, a certified financial planner in Virginia.
Limit your spending
While you are paying down your holiday spending, put your credit card away. And try to restrict frivolous post-holiday shopping, said Marcy Keckler, vice president of Financial Advice Strategy. “Sometimes retailers will take things that they have left and they will mark them down even further to the point where it feels really attractive.”
Redeem and return
You may not be shopping as much in January, but the shopping you did over the holidays could pay off, Keckler said. If you used a cash-back card, she recommends redeeming points or miles you accumulated. For instance, redeeming points for gift cards can “function in a similar way to cash in your day-to-day spending,” she said. Also, return gifts or purchases you don’t intend to keep.
Give yourself an allowance
Shane Sullivan, a certified financial planner, advised determining a set amount of money you can afford to spend on fun stuff each month. Then, create one checking account for bills and a separate account for discretionary spending money. For spouses, create a separate one for each person. Use the discretionary funds on whatever you would like, but draw only from the predetermined amount.
Make it a challenge
If you are still looking for a way to make saving easier, set a challenge to keep yourself motivated. For example, certified financial planner Barbara O’Neill said one method is to make a weekly deposit for 52 weeks. Each week, save the same amount of money as the number of the week ($1 in week one, $2 in week two and so forth). After 52 weeks, you’ll have saved $1,378.