5 Tips to Get Back on Budget After the Holidays
Portions from nerdwallet.com
Soon the holiday season will be over. Unfortunately, the financial burden of paying for gifts and dinner parties might remain on your credit card.
What’s the best way to get back on track? Consider these 5 tips:
- Know where you are – Look at your credit card statements, while also considering your usual monthly bills like rent and utility payments. NerdWallet recommends the 50/30/20 budget. Earmark 50% of your monthly take-home income to needs, 30% to wants, and 20% to savings and debt repayment. Easily set up an automatic savings plan with a Goal-Based Savings account.
- Limit your spending – Stick to carrying cash or using your debit card until you’re back on plan. It’s tougher to part with cash so you may be less likely to overspend than if you used credit cards.
- Redeem and return – You may have racked up credit card rewards during your holiday shopping. Redeem those points for gift cards you can use for cash at grocery stores or for everyday purchases. Don’t forget to return gifts you won’t use and get your money back before the return window closes.
- Give yourself an allowance – It’s not realistic to eliminate all spending. Determine a set amount you can afford to spend on “fun stuff” each month, and don’t exceed it.
- Make it a challenge – Try the 52-week savings challenge to see how easy it is to save $1,378 in just one year. Simply save $1 the first week, adding an additional dollar saved each week after that so by the 52nd week you add $52 to your savings. The total from this simple method adds up to more than $1,300!