Now that the holiday season has passed you may be checking your bank statements and feel a sense of panic. Did you overspend? If so, it is okay! There are plenty of ways to adjust your finances and get your budget back on track. If you are not sure where to begin, keep reading to learn more.
Free Yourself from Guilt
If you went off your budget for the holiday season it is okay. It is important to free yourself from any guilt that you may be feeling about overspending because there is no turning back now. Instead of feeling guilty, you can transform these negative feelings into something more positive for you and your finances.
Take this opportunity to write down where you may have overspent versus where you could have saved. You should also make note of all the unaccounted costs, such as shipping fees and gift wrap as these should be a factor as to how much you have spent in total. That way when next year rolls around you can factor these costs into your budget and plan accordingly.
Assess Your Situation
Once the holiday season is over, it is important to look at your finances to assess your financial standing. Whether you spent cash or used your credit cards, knowing where you stand in terms of your money can be a great way to determine how to reconfigure your budget.
Consider using the 50/30/20 rule for budgeting to get yourself back on track. This rule of thumb allows you to allocate your money towards your needs, wants, and financial goals. 50% of your budget should go towards your needs, such as rent, utilities, and groceries. 30% of your budget should go towards your wants, such as dining out, subscriptions or streaming services, and hobbies. The last 20% of your budget should go towards your financial goals, such as saving and paying off debt. By following this rule, you will be able to get your budget back on track, especially after holiday spending.
Ask For Advice
The holiday season is a time of joy and celebration, but it can also be a financial strain for many people. If you feel overwhelmed after the holidays, you must speak to a financial adviser. A financial adviser can help you create a budget and get your finances back on track. At financialadvisers.co.uk, they can connect you with qualified financial advisers in your area who can help you develop a plan that works for your budget and your lifestyle.
Limit Your Spending
If you used your credit cards for your holiday shopping, your credit card statements may be a sight for sore eyes. Take this time to limit your spending on your cards and instead work to pay them off to allow yourself to feel more comfortable financially. One way to avoid using your cards for the time being is to stick to carrying cash. This can also provide you with a limit of how much you can spend on an outing, instead of swiping your card and dealing with the consequences later.
If your credit card balances are where you are struggling financially, consider the debt snowball method by Dave Ramsey. This method allows you to lay out all your debt in front of you so you can see all of your debt ranging from most to least. You then make minimum payments on each but pay as much as possible on your smallest debt. This allows you to focus on one debt at a time without stressing yourself out about how you are going to pay off each with only the minimum payment. Once one debt is paid off, you repeat the process with each until you are debt free.
Invest In Yourself
Consider this time as the perfect opportunity to invest in both yourself and your money. Passive income is a way to make earnings in which you are not actively involved in the process. This form of income is an excellent way to make and save money for when you may need it most, whether that be next year’s holiday season, an emergency, or maybe even an expensive purchase.
One of the many examples of this is investing in various stock portfolios. While the stock market can seem intimidating, learning how to invest in stocks can prove to be beneficial to your wealth management. Once you decide which stocks to invest in, you can track your progress and watch your investments grow without lifting a finger! If you are unsure of which stocks to invest in, consider a DIY approach in which you do a little research and find what you are most comfortable investing your money in.
Make It a Challenge
To keep yourself motivated and to stay on track, make saving your money a challenge. There are plenty of different ways to do so and it can be a way to set aside some money that you know you will not touch. For example, you can participate in the 52 week savings challenge. In this challenge you will create a chart and a weekly goal of how much you would like to save. If you correspond the amount of money to put aside with the week of the year, you can save up to $1,378 in one year.
Other challenges you can incorporate into your budgeting plan are the no eating out challenge, the five dollar bill challenge, round up money saving challenge, and the no spend challenge. Each of these are smaller tasks that you can participate in at the same time and are simple ways to put extra money back into your pocket.
Set Goals
One last way to get your budget back on track is to establish financial goals for yourself. Once you have established how much you have spent, and what you have spent your money on, you can then create goals to work towards in the new year. Commit to writing your goals down on pen and paper, and place them somewhere (such as your fridge or your bathroom mirror) to remind you each day of what you are working towards. Plus, nothing feels better than checking off a completed goal!
Additionally, you should make sure that when creating your goals, they are specific, measurable, and unique to you and your financial situation. Being specific with your goals will allow you to achieve them in a timely manner and help you to focus on them better. Having a measurable goal is also important because that is something you can track the progress of and keep you motivated to continue towards the path of completing your goals. You should also consider giving yourself a reasonable deadline, simply to keep you on track and continue to motivate you as well.
No matter if you decide to try one or all six of these different methods, getting your budget back on track is incredibly important regarding your wealth management. Using these methods can help to alleviate any stress that is caused by being off your budget, and can help to keep your budget in line for years to come.
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I was really in need of this post! My finances have been all over the place ever since Christmas
Great tips, I haven’t yet overspent anything but will keep these in mind. Thank you for sharing!