We may compromise with our requirements daily but holidays are the time to enjoy a splurge. Families and friends spend time together decorating their houses or organising the yearly parties. However, the problem occurs when we lose track of the budget to exceed the bills beyond our affordability.
We wake up to return to our regular stressful life once the holiday parties are over. But the hangover takes the grip over finances because of the pending bills. The financial hangover after the holiday is a situation very common in adults with different methods to manage it.
What is a Holiday Financial Hangover?
Holiday financial hangover is the aftermath of celebrating holidays with parties and gifts. You spend more than the budget to create a financial problem that may turn into a crisis. The pending bills, overwhelming debts, and cost of living create a hangover-like situation with no instant cure.
You must create a financial plan to manage the debt repayment with a limited income. Similar to an alcohol-induced hangover, you will find different methods people follow to make their financial condition normal. Thus, prepare yourself for lifestyle changes with some extreme measures to prevent the long-term consequences of a holiday financial hangover.
Tips to Cure Holiday Financial Hangover
Waking up the next day with bills on your doorstep is not the ideal start for your new year. They may seem intimidating considering your limited income to manage everything. Still, you can use the following tips to gain control over the situation and get rid of the holiday financial hangover.
Create a Budget
First, you need to create a list with the liabilities, bills, and other essential expenses for next month budget. It will give a clear insight into your financial condition to find the amount of damage. Thus, you will have a better chance of creating an effective plan to get rid of the hangover.
Use the account statement of the previous month to find the expenses and debts. We often forget small elements in the list that leads to the failure of the entire budget. Thus, give the processing time to find the entire list of expenses in your next budget along with the costs to cut.
Negotiate with Lenders
You can negotiate with the lenders to get a reduced interest rate over the existing debt. It may come as a surprise but many of them will relax the terms to provide the required support. They understand the financial troubles of customers and doesn’t want them to default on their loan.
They may not reduce the interest rate to provide relief on the overall cost or instalments. However, the term extension is a good option to make the repayment manageable. Some private lenders may offer repayment holidays to give you time to manage the urgent bills.
Do Not Use Credit Cards
Keep your credit card in the locker to prevent more damage to your financial condition. Their use will only result in more debt with high-interest rates. Thus, the debt situation will get worse only to put immense stress on your finances.
You should use cash while shopping for the essentials to avoid buying items outside the shopping list. If not cash, carry debit cards or prepaid cards to keep spending in check. For expenses outside your budget, take small loans with lower interest rates to pay less on the instalments.
Another option to reduce the stress of the repayment is a debt consolidation loan. It is a special type of loan lenders offer to their borrowers to repay the existing high-interest debt. Thus, the repayments get affordable and simpler for them to provide relief during the financial crisis.
You don’t have to manage multiple debts with different payment dates only to end up missing a few of them. Thus, adding more cost to your existing stretched budget with no space for additional spending. You must add any prepayment fees to the overall cost of debt consolidation while comparing the offers.
Return Gifts and Other Items
Returning gifts is a very extreme measure because of the sentimental value attached to them. However, you should compare these values with the financial troubles because of the holidays. It makes more sense to get something you need more than anything from your loved ones instead of fancy decorative items, i.e., money.
You can return the gifts to the original stores to get a refund on the purchase. Use the same method to raise money by returning the items you bought during the holiday. These may include household items or personal accessories that will help repay a few debts.
You may want to declutter the house by selling a few unused items on sites similar to eBay. The latest trends show people are adopting a minimalist mindset to live a clutter-free life. Use the same approach to get rid of the useless items in your household.
Find the sites dedicated for the product type to get the best value for them. Some items may have more value than your expectation in the collector’s market. Or, you can use a garage sale to raise money from regular items within the weekend.
You should start a side hustle to gain control over your financial condition. The process to sell a product online is easier than ever with online marketplaces. Or, you can open your eCommerce store but it will require work with marketing and management.
Freelancing is another option to support your finances outside the 9-5 job. Creative and technical skills are in great demand on the numerous platforms available online. You can take a business loan to cover the entire cost of your side hustle or new endeavour.
Cancel the Vacation
Your vacation plan may not seem feasible after the major splurge at holiday and the financial troubles. Save your money from the exotic summer vacation to repay the overwhelming debts. It is a short-term measure as the vacation can take place after a few months with controlled spending and savings.
You can still enjoy a small trip to relieve the stress of your professional life and constant budgeting. Visit the countryside for the weekend to live close to nature while keeping the budget in control. Or, you can take your family on a staycation to explore the nearby regions with a car trip.
Cancel Subscription and Services
You don’t need to stream content on multiple platforms to get entertained amid the financial mess. A single platform can help you survive the next few months with enough engaging content. Similarly, you will find many unnecessary subscriptions and services in your account statement that will require reconsideration.
These may include the gym or club membership used rarely because of the busy schedule. Also, certain services such as car wash, garden care, and newspaper are not among the essentials. You can manage them on your own while the news is available for free on your smartphone.
To sum up, a financial hangover after the holiday is a difficult situation to manage based on the number of unpaid bills. You must create a plan to avoid more damage because of the bad decisions. Also, keep your calm as the situation will get normal after the use of the above tips and consistent efforts.
Emma Anderson is a highly accomplished Editor-in-Chief at 24cashfinances, renowned for her exceptional expertise in the finance industry. Holding degrees in Finance and Marketing, Emma has developed a deep understanding of the financial landscape, particularly when it comes to loans and personal finance.
Emma’s professional journey began as a financial analyst, where she gained hands-on experience in evaluating market trends and analysing investment opportunities. Emma’s enthusiasm for writing and her goal to educate and give individuals a voice motivated her to move into financial journalism. Her work has been published in popular magazines and she has produced thought-provoking pieces on various financial topics.