The holidays can be a total budget killer. All the tinsel and egg nog and festive lights can sometimes confuse us into justifying abnormally excessive shopping behavior, which can kick off a naughty spending habit that follows us into the new year. And it’s not pretty when those credit card bills arrive, am I right?
Whether you’re going cold turkey or need a little boss lady intervention, today’s topic is about recovering from the budgetary gluttony of 2014 (just in time for Lent, if you’re into that sort of thing!).
P.S. Stay tuned for a fabulous giveaway courtesy of Nicole Lapin and TLABL tomorrow!!
Recover from a Spending Hangover
by Nicole Lapin
It’s an easy thing to do: blow your entire month’s budget on holiday shopping, festive outfits, and dining out. Trust me: I’ve been there, too.
It wasn’t until I had graduated from college and landed my dream job at CNN that I got my first credit card. I know, I know… I was a bit behind the times. But I was raised in an immigrant family, where cash was queen and debt was just not okay. I made the move to Atlanta to start my new job, and suddenly there were all of these things that I thought I needed… or at least deserved. A new on-air wardrobe felt like a must (I was worth it, right?) as well as furniture and décor for my new apartment (after all, I had to be able to entertain all of my new friends in style!).
The trouble was, I hadn’t experienced the perils of interest before…and by that first holiday season, not only was I broke—I owed $5,000 on my credit card. Ouch. Those $25, $50, $100 purchases made here and there had snowballed into $100, $200, $500 with interest, faster than I ever would have imagined possible. Finding myself in debt for the first time in my life kept me up at night, and I resolved to start the new year afresh and debt-free… or at least on my way to becoming debt free.
So how’d I do it? I’m not going to sugarcoat it: it’s not easy, and certainly not fun. But it can be done, and anyone can do it.
1. Do double- or triple-time on your credit card payments. Those credit card charges add up faster than you might think, and you may end up paying $50 for a pair of socks before you’re through paying off your cards. Of course, the best solution is to pay off the balance of your cards right when the statement arrives, but that isn’t always a viable option. Instead, try to curb enough of your other expenses (take from your “fun money” category first) to double-down on your payments each month.
2. Get an early start on your taxes. If you are one of the lucky taxpayers that actually receives a refund each year, do your taxes as soon as you receive all of your forms from employers, investment companies, and banks. Use the refund to pay down your debt, or, if you have a good handle on that already, use it to invest in next year’s holiday spending.
3. Get a jump on spring cleaning. I know your dirty secret: those boxes and bags full of perfectly good stuff that you have tucked away for a rainy day. Take advantage of a snowy day instead, and pull out the clothes, appliances, and household items that you haven’t used in a while, or don’t want anymore. You can auction them off on eBay, or post on your local Craigslist, and then use this “free money” to pay down your outstanding expenses.
4. Hit the sales. It might sound counterintuitive to go shopping after the holidays, but the only discounts deeper than those before the holidays are those directly after. Score some gifts for next year—plus wrapping paper, holiday cards, and ornaments—at 60-75% off. This time next year you’ll be glad you did! (One caveat: remember that just because it’s on sale doesn’t mean it’s cheap).
5. Take an entertainment time-out. If you’re like me, you probably saw enough holiday movies, concerts, and recitals to last until next year—not to mention the dinner and bar tabs. In order to raise some cash to pay off your cards, put a moratorium on going out to dinner and movies, at least through February or so. Take advantage of the downtime to enjoy all of the gifts you were given; curl up with a new book, or play outside in that cozy new jacket.
A little more about Nicole Lapin…
“Talking about money sucks—but so does being broke.
Do your eyes glaze over just thinking about the mumbo-jumbo language of finance? Do you break out into hives when faced with getting your financial life together? Well, sister, you are not alone. In RICH BITCH, money expert and financial journalist Nicole Lapin lays out a 12-Step Plan in which she shares her experiences—mistakes and all—of getting her own finances in order. She talks to you not like a lecturer but as your friend. And even though money is typically an “off-limits” conversation, nothing is off-limits here…
Instead of focusing on nickel-and-diming yourself, Nicole’s advice focuses on investing in yourself so you don’t have to stress over the little things. But, in order to do that you have to be able to speak the language of money. After all, money is a language like anything else, and the sooner you can join the conversation, the sooner you can live the life you want.
RICH BITCH rehabs whatever bad money habits you might have and provides a plan you can not only sustain, but also thrive on. You won’t feel deprived but rather inspired to go after the rich life you deserve, and confident enough to call yourself a RICH BITCH.”