New Year’s Day has already come and gone, leaving us to “look forward” to Blue Monday, the (unofficial) most depressing day of the year. This year, Blue Monday falls on January 20, the third Monday of the month. The day is calculated by factoring in things such as weather and, yes, debt levels as people start to receive their credit card statements from December.
Maybe this year you – and your wallet – are feeling the blues from a holiday season of heavy spending. Paying down your credit card debt may currently be your number one priority with a new year’s resolution to be more fiscally responsible. So, instead of leaving your holiday planning to the last minute and putting everything on credit, you’re going to plan ahead of time… starting now! It may sound unrealistic – who starts planning for Christmas in January? – but the only way to avoid a financial hangover next year is by taking preventative measures today. Drink a lot of water and follow these simple steps to never have a debt-plagued January again.
Paying Down Your Balance
Before you start to save for next year, you may have to recover from your post-holiday debt. If you swiped your credit card a little too freely over the holidays, the interest might be bogging you down. You may want to consider applying for a low interest rate credit card, where you can transfer your existing credit card balance.
The MBNA True Line® Mastercard® credit card offers a 12.99% interest rate on balance transfers. A fee of 3% of the amount advanced (minimum $7.50) does apply.
Although your debt doesn’t magically disappear, transferring your balance may allow you to take advantage of lower interest rates and get ahead. To take full advantage of this card, you’ll want to tuck it away for a while. New purchases won’t have the same grace period and are charged full interest rates. If you’re lucky, this will be your last financial hangover.
Use Last Year’s Spending to Plan This Year’s Budget
You have all the receipts, bills, and statements in front of you, so now is the best time to review exactly how much you spent on gifts, food, and other expenses over the holiday season. Use these figures to make your budget for next year and see where you could cut a few corners.
Start Saving, Now
Now that you have a number to work towards, you can start putting aside a little bit of money each month to reach that goal. Open a savings account that’s specifically for holiday spending. It may sound over the top, but you could save faster than you expect.
Non-traditional financial institutions or online-based banks are more likely to have higher interest rates because they have lower operating costs, which enables them to pass on savings to the consumer. For example, Motive Financial offers an almost unheard-of interest rate of 2.8%. Another great option is the Oaken Savings Account at 2.3%.
You may soon have more than enough for the holidays. However, if you find that your current earnings aren’t enough to cover the savings, this is also a good time to look at making some extra money. Declutter your house and plan to have a spring yard sale in April, take on a few extra hours at work, or start your own side business.
Buy Holiday Stuff Now
Many retailers are slashing the prices on their holiday goods, so now is the perfect time to stock up. This is especially true for small items such as wrapping paper, cards, and decorations.
It’s only been a couple of weeks since Christmas, so you probably have a good idea of who you need gifts for next time around. If your list doesn’t look like it’ll change too much, keep an eye out for gifts throughout the year. For example, buy winter gear for your family at end-of-winter clearance and do the same for each additional seasonal sale.
Plan a Low-budget Christmas with Friends and Family
The holidays don’t have to be about spending tons of money! Have a chat with your family and friends about how to keep costs low next Christmas. Plan a gift exchange with your family, a dinner out with your friends, or opt for homemade baked goods as gifts. There are plenty of options for cutting costs, while still spreading holiday cheer.
The holiday season is all about spending… time with the people you love. And when January rolls around, those feelings of joy and love may turn into feelings of disappointment and anxiety due to post-holiday debt. Make it a bit easier on yourself by taking a few moments to plan so you can avoid that financial hangover.
This post has been updated.