A recent survey from Consumer Reports noted that 75 percent of shoppers had paid off their 2013 holiday purchases by the end of February 2014. However, some were still paying for their celebrations in late November, i.e., almost a year after the fact.
True, that was just 7 percent of respondents. Still disturbing, though. Then again, I find it unfortunate that it takes some people two full months to pay the tab in full.
Afraid to open the January credit card bills? Personal finance author Donna Skeels Cygan calls this a “holiday hangover,” i.e., the lingering pain of overindulgence.
This kind of hangover isn’t one “you can simply sleep off,” says the author of author of “The Joy of Financial Security: The Art and Science of Becoming Happier, Managing Your Money Wisely, and Creating a Secure Financial Future.”
In this case, the hair of the dog is twofold:
- Owning any mistakes you made this year, and
- Learning from them.
Here’s how.
1. Stop digging. If you’re in the hole then put down the damned shovel, already. No unnecessary shopping, not even window-shopping.
Don’t even go to the supermarket until you’re out of something like milk or produce, and forget about eating out for a while. Instead, inventory the contents of your pantry, fridge and freezer and plan some good meals at home. If you hanker for favorite takeout/restaurant foods, search for recipes and make them at home. Could be you have a genius for barbecued chicken pizza or Swimming Rama.
2. Assess the damage. It’s easy to forget how much you actually spent, especially if you started shopping early. Check receipts and bank and credit-card records, for things like special holiday foods, decorations, that new outfit for the big company bash, the cost of mailing the Christmas letter, presents for your kids’ teachers, the extra gas to get to holiday dinners and parties…
“Often there’s a disconnect between what we think we spent and what we actually spent,” Cygan says. “Until you get real about where your money goes during the holidays, you won’t be able to prevent overspending in the future.”
3. Take some of it back. Did you give (or get) presents that just weren’t a good fit, or buy dressy duds you wound up not wearing? Maybe you can get some of the money back. If all you can get is store credit, see how long it’s good for and hang on to it until it’s time to replace a kid’s shoes or buy a birthday gift for your mom.
4. Ask what was worth it. Maybe you wanted your grandkids to experience “The Nutcracker” – and maybe they squirmed, fidgeted, yawned or otherwise made you wish you had your money back. Point taken. Or perhaps you thought that inviting the whole fam damily to your house for Christmas dinner was a great idea, but wound up spending hundreds of dollars on food and drink. So maybe next year make it a smaller gathering, or provide a turkey or ham and ask others to bring their best dishes.
5. Discard the cards. If you received any gift cards for Christmas or Chanukah, sell them on the secondary market and apply the proceeds toward consumer debt. But if the cards are for movie theaters or favorite restaurants, hang on to one or two to make the digging-out process a little less gloomy. On that note…
6. Find cheaper fun. Movies from the library. Potlucks. Bike rides if you’re in a non-snowy area, skating or sledding if you’re not. Book clubs; start one that appeals to your favorite genres.
7. Look for extra cash. Not just under the couch cushions, either. See if a consignment store will take some of your clothes or your children’s garments – including gifts from this year. (Your sister meant well by giving you that glitzy handbag, but if you know you’ll never use it then see if someone wants to buy it.)
8. Get serious about saving. Use hacks like the Random Number Challenge or the Spare Change Challenge. Visit the CouponMom.com website and view the coupon/sale matchups in your local stores, which can make home-cooked meals cheaper and cut the amount you’ll have to spend on toiletries and other products.
Go without a few things for a while; although the phrase “latte factor” sets my teeth on edge, I will say that it’s surprising how much money just slips away. Track your spending through a site like Mint.com or PowerWallet to identify the cash leaks, then plug them.
9. Be proactive. Figure out what sent you off the rails in the last couple of months of 2014. Maybe it’s bargain mania that began on Gray Thursday and continued through Cyber Monday. Perhaps you feel insecure about the quality and quantity of your gifts at extended family gatherings.
Could be you procrastinated and then found yourself rushing around in a disorganized way. “The longer you wait, the more you’ll spend,” warns personal finance author Mary Hunt, who also runs the Everyday Cheapskate and Debt-Proof Living websites.
Making a list and sticking with it can help. So can breaking down that list so that you buy a few gifts/décor items/holiday foods per week, beginning in September or October, vs. overspending because you have no time to comparison shop.
10. Rethink the holiday. That list I just mentioned? Make another one, of people you might not really have to buy for but felt pressured into treating this year. Can you truly afford to buy for nieces and nephews who have kids of their own at this point? What is your typical version of the holidays doing to your long-term financial goals? (Hint: Opportunity cost is a bitch.)
Float some alternative ideas to friends and family: a Secret Santa within your friend circle, homemade treats for the office vs. buying presents for half a dozen co-workers, drawing names for extended family gatherings, gifts only for people under 18 or over 80. You may hear wails of outrage or mutterings of “Scrooge,” but some folks may be secretly glad you brought it up.
11. Write about it. Cygan suggests starting a journal about your post-holiday hangover. Be honest about what you’re feeling now: “The anxiety, the frustration, the anger, the regrets.” Put a copy of it in your evergreen gift closet (which is another good way to keep things affordable) or stash it with your holiday stuff. Or write a note on the calendar to read this journal in late summer or early fall, to remind yourself why you need to make a change.
Readers: Did you overdo it this year or come in at or under budget? Got any tips to share?
Related reading:
- 5 reasons procrastinators are screwed at Christmas
- How to beat the post-holiday slump
- Whose Christmas costs more?
I made a commitment some years back to NOT get caught up in the holiday frenzy. I bake gifts of cookies for holiday gatherings, and banana nut breads for close friends & family, and find that they look forward to it each year, and even donate their “aging” bananas to ensure they get one!
Another tip? Don’t get caught up in the “I have to go get Susie a gift because she just gave me one” – someone gives you a gift because they wanted to, graciously accept & thank them – it is not written that you must run out and buy them something. (Took me a while to learn that one!)
“Gift wars” — sigh.
I’ve moved away from cookies and toward peanut brittle and sea-salt caramels, both very easy to make and both criminally delicious due to all that butter (bought on sale with coupon or from Costco, of course).
If anyone’s interested, the recipes are contained in this post:
http://donnafreedman.com/2013/12/19/of-caramels-and-sidewalks/
Once nieces and nephews turn 18 they are adults and get a card.
I think more families will go this route if the economy remains flat. You’d like to give but it just isn’t always possible.
I set a budget for all the people we have to buy for (all of DH’s family… grrr…. they all live nearby), and I make every effort to stick to it. My sibs and I mutually agreed to stop exchanging gifts years ago, largely because we are scattered all over the country. To save money, I re-use gift bags and tissue as long as they’re in good condition; give “couple” and “family” gifts whenever I can, shop the sales, use coupons… you guys know the drill. I still managed to spend about $1300 including tree and decorations, plus a cash contribution to my husband’s sister, who always hosts dinner and never asks us to bring anything.
Wow! I wonder what it would have cost if you weren’t shopping wisely…
I reuse gift bags as well. Lately I’ve found several really gorgeous ones in the mixed-paper bin at the recycling center. One was also stuffed with various colors of tissue; guess it was the repository as other items were unwrapped.
Donna – Thanks so much for quoting me in your article. Your common-sense financial advice is reaching a lot of people, and you are helping people attain financial security.
Hi Donna —HAPPY NEW YEAR!!!!
My daughter gave new a bag of raw peanuts so I looked at your peanut brittle recipe, did you use roasted or raw?
The recipe calls for roasted — which means that your house is going to smell delicious twice, i.e., once during the roasting and once during the brittle-making.
Perfect….thank you for the response.
I have (and always have had) a rule to live by:
I NEVER buy anything on a credit card that I could not just as easily pay for by debit card, check or real cash. NO January and/or later bills for me.
This is all good advice for any time of the year! We didn’t spend very much on Christmas, mostly because we were able to use credit card cash-back points to buy gifts for our families, which really helped keep our costs low.
I like the idea of selling unused gift cards–we have quite a few that we’ll probably never use.
I spent less than $40 out of pocket myself. My presents were a mix of rewards point cash-ins, regifting, stuff from conferences, and a couple of lucky breaks (won a raffle and won a gift card in an online contest).
Check the prices on Gift Card Granny (click on “sell gift cards”) but I’d also suggest asking around. Maybe a friend or co-worker would like to buy that whatever-it-is for cash or a dollar or two under cost. Compare that to what you’d get on the secondary market.
Some people advertise them on Craigslist, which is fine if you do your due diligence. (Any time I sold something on Craigslist I made sure my son-in-law, who has studied martial arts, happened to be outdoors when the person dropped by to purchase.)
This year we turned the holiday gift spigot nearly to “off”. We only exchanged gifts with our son and his girlfriend. We had some items purchased but we’ve made arrangements to give those items later in the year.
My husband and I are somewhat frugal and our big splurge is travel. Compounding our Christmastime financial woes was an upcoming cruise and airfare. So we had the “usual” distended holiday purchases plus our travel bills.
I have a few part time jobs that I am able to manage in my off hours from my day job. The money’s not great but it certainly helps takes the edge off our current situation.
We should be back to “normal” bill-wise on next payday. I feel really fortunate that I was able to find part-time work that pays really well to help us dig out from Christmas time debt quickly.
I know others aren’t so lucky.
Enjoy that cruise. You’ve certainly earned it.
We had a very frugal Christmas. Our family present for ourselves and the kids was an upgrade to smartphones, partly financed by financial gifts we received. Due mostly to time constraints and after a family discussion, we gave the kids cash instead of shopping for them. The only other gifts we gave were handmade scarves to my sister and her kids. (We don’t usually exchange gifts, but I was having so much fun making scarves…)
We did send Christmas cards, and I bought next year’s at the after-Christmas sales. We didn’t buy any decorations – we have a gracious plenty! We had a turkey for Thanksgiving and a ham for Christmas, both bought on sale, and didn’t go overboard on sides. Almost forgot – my husband and I bought $10 tickets to see some friends of ours perform a holiday concert at a local coffee house. (Money well spent – the performance was excellent!)
Overall, it was a quiet, low-key Christmas, exactly what we needed after a very hectic year. And other than a bump in our phone plan, which would have happened no matter when we upgraded, no holiday bills to pay off. Win!