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Last Updated April 6, 2020

Did you go a little overboard this year with your holiday spending? Or maybe you celebrated a little too much for New Year’s. You may have badly gone over budget and you’re wondering “now what?” Find out how to quickly recover from your holiday spending this year.

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How To Recover From Your Holiday Spending

Asses The Damage

The first thing you need to do is assess the damage and determine exactly how much you spent during the holidays. Don’t wait until your credit card statement comes to see what you owe. Log into your credit card’s website to check your current balance today.

Write down how much you owe on each credit card and at what interest rate. Add up the current balance of all the credit cards you used to do your holiday shopping.

It’s better to know what’s coming, so you can prepare for what you need to pay back.

Return Purchases

An easy way to recover from your holiday spending is to return as many purchases as possible. Start by returning the gifts you bought for yourself. If you don’t have a receipt, some stores will still accept returns in exchange for store credit.

I would return purchases even if you only get a store credit because you can use that credit to purchase necessities that you would need to buy in the future anyway.

Recover From Holiday Overspending

Sell Unwanted Gifts You Received

The next step to recover from your holiday spending is consider selling the gifts you received to earn some extra money. You can sell your unwanted gifts on sites such as Craigslist, eBay, or Facebook marketplace.

You can sell any unwanted gift cards you received for cash on websites such as Gift Card Granny, Raise, Cardpool.com. Take this extra cash and put it towards your credit card bill.

Use Holiday Bonuses

If you are lucky enough to get a holiday bonus, take that money and put it towards your debt. Don’t look at your bonus as an opportunity to spend more; use it to recover from your holiday spending.

If you’re not fortunate enough to get a holiday bonus, use any Christmas money you received to put towards your credit card bill. Also, consider using any other lump sums of money you received from things such as birthdays or tax returns (if you’re still paying off debt at that time).

Determine Your Repayment Strategy

If you take my advice, by this point, you have reduced your debt to as little as possible by:

  • Returning all the items you could;
  • Selling any unwanted gifts to earn some money; and
  • Using any extra holiday bonuses you had to reduce the amount you owe.

Now, you have to make a repayment strategy to pay off any remaining debt.

Start by listing all of your credit card debt from highest to lowest interest rate. Use the Debt Worksheet in my FREE Resource Library to help you keep track of this. 

Next, plan to pay off the debt with the highest interest rate first (even if it is the debt with the highest amount), because it makes the most financial sense.  Using this strategy will make sure you pay the least amount of interest on your debt.

For your lower interest debt, pay only the minimum monthly payment while you are focusing on paying down your highest interest rate debt.

Once you have paid off one debt completely, take the funds that are now freed up and apply it to the next debt in line until that is completely paid off—then repeat again. This debt payoff method is frequently referred to as the Debt Avalanche Method.

Wealth creation

If you’re like me, you like to use paper and software to help you with your financial journey. For those of you interested in using technology to help with your debt repayment plan check out Undebt.it. It is a FREE tool to help you get out of debt.

I absolutely LOVE this website! There are SEVEN debt payoff plans you can choose from (including the debt avalanche and debt snowball method). You can even compare the different payoff plans to see which is best for you or make your own custom plan!

They also have debt payoff calculators which is also FREE. You can keep track of all your payments and your debt payoff progress in one place.  This software is so AWESOME and absolutely FREE! I haven’t come across something this good in a while!

You can also sign up for the premium account that has more features for you to take advantage of. The premium account is $12 for the entire year (only $1/month), which is still very affordable.

There’s a 30-day FREE trial if you want to check out the premium account. What I would do is sign up for the free account first, and then click on the free trial to check out the premium features. If you like it, then sign up for the premium account.

pay off $500,000 in debt

Once you have a debt repayment plan, you can use an app like Tally. Tally is the world’s first automated debt manager that makes it easy to save money, manage your cards and pay down balances faster. It’s absolutely free to download, and they don’t charge any fees to use the app.

The way Tally works is they monitor your balances, APRs, and due dates on each credit card you register. Tally’s smart technology will determine which cards to pay first, based on factors such as APRs and utilization.

In order to get the benefits of Tally, you will need to qualify for and get a Tally credit line. Depending on your credit history, your APR (which is the same as your interest rate) will be between 7.9% – 25.9% per year. 

If you have cards with a lower APR than your Tally credit line, you can manage the payments to those cards yourself; or have Tally pay only minimum payments to those cards to make sure you won’t be charged late fees.

free debt payoff tracker

Speed Up Paying Off Your Debt

You can also use an app like Qoins to help you automatically pay off your debt even faster. You’ve likely heard of apps that turn your spare change into investments (like Acorns) but Qoins is an app that takes that change and uses it to pay off your debt.

Qoins will send out payments according to the schedule that you’ve set up. They also track how much you’ve paid out towards your loans and see how much of a dent you’ve put in your debt.

I highly recommend Qoins if you want to speed up paying off your debt, while making it as easy and painless as possible.

How To NOT Overspend For The Holidays

Holiday spending

Make A Budget

Having a budget is the best ways to get your spending under control and recover from your holiday spending. It allows you to figure out what areas of your spending you can cut back on and save some money.

You can then put this extra money you have, by cutting back on your spending, and apply it to your debt.

If you need help making a budget, you can download this FREE Printable Monthly Budget to help you get started.

However, if you want to get serious with your savings and need something a little more sophisticated, you can get my Monthly Budget Template.  This is the template I actually used to save over 50% of my income every month, and it is the same template I use to this date.

Monthly Budget Template
My Monthly Budget Template

Start Saving For The Holidays Now

Keep in mind how you got in this situation in the first place—you probably failed to properly prepare for the holidays in advance. It’s never too early to start saving for the holidays.

Money-Saving Tips To Help With Your Holiday Spending

FREE Savings Tracker

Make A Budget

You need to make a budget for your holiday spending. The last thing you want to do is spend far more than you can really afford. Once you have an overall budget, set a dollar amount you will spend during the holiday season. Stick to that dollar amount you determined you can afford and don’t go over that amount.

Make A List

Make a list of the people you need to shop for and the specific items you’re hoping to get. Limit yourself to only buying these items. You don’t want to buy items you don’t really need. Focus only on retailers who will likely have the item you’re looking for. Don’t get tricked into buying things you don’t need just because they are discounted.

Shop Online

Holiday spending

Shopping online can sometimes save you more money than if you were to shop in-store. Some stores have exclusive deals for their online shoppers. Shopping online also limits the amount of impulse purchases you will make. You will more likely stay focused on your list and not get tempted to purchase additional items.

Amazon is a great place to do your online shopping. Amazon Prime members get additional benefits such as discounts on Audible, Amazon Music, Whole Foods, along with other benefits. You can sign up for a FREE 30 day trial of Amazon Prime HERE.

Use Cashback Websites

Don’t forget to use cashback websites when shopping online! One easy way I would save money is by using online coupons and rebate sites.  Two great websites I use are Ebates and Ibotta.

If you don’t have an account, sign up right now! It is literally FREE money. When you sign up right now and purchase something you will get a $10.00 bonus from Ebates and Ibotta. 

All you have to do is go to one of these websites, search the store you want to buy from online, and then click on that store.  You are redirected to that merchant’s website and you can shop as normal with your credit card, debit card or gift card.

You can use coupon codes and the store site functions exactly as if you had not come through the cashback website.  After you complete your order, you will get cash back to your Ebates and Ibotta account.  There’s literally no reason why you should not be using these websites.

online Holiday spending

Finally, if you like to shop on your cell phone, check out the cashback app Drop. Drop is the free app that’s giving out millions in cash rewards for the spending you do every day. So you should definitely download the Drop app and save some money.

Have A Secret Santa

If you have a big family or a lot of people to buy gifts for every holiday season, consider having a Secret Santa’s instead. A Secret Santa is an arrangement in which a group of friends, family, or colleagues exchange Christmas presents anonymously. Everyone is assigned another member who you buy a small gift for, typically costing no more than a set amount.

I like the Secret Santa option because it helps relieve some of the stress and financial burden associated with having to buy gifts for everyone you know.

Shop Throughout The Year

Don’t just wait until the holiday season to start doing your holiday shopping. You can save a lot of money on your holiday spending if you shop throughout the year. Whenever you see a good deal, buy it and save it for the holiday season. You also save yourself from being a part of the holiday hustle and bustle.

Make A Homemade Gift

Holiday spending

Sometimes making a homemade gift can be a cheaper alternative than going out and buying a gift. Personally, I think people (myself included) appreciate homemade gifts more than store-bought because you know much more time and effort was put into the gift, and it was made with love.

For example, my sister gave everyone in the family a photo collage for Christmas last year. It was so touching because she took the time to print out pictures we took over the year that provided priceless memories. If you would like to do something like this, you can buy this Scrapbook Photo Album DIY Kit from Amazon.

Give Your Services

Consider offering your services as a gift. Think about the tasks that you can do for someone.

For example, my best friend is excellent at calligraphy and can write out invitations or certificates. My uncle is a brilliant photographer and can offer a photoshoot or professional photos. My cousin is an outstanding tutor and can help with math or science classes. I am a lawyer and can help someone draft up a legal document.

What services can you provide? Maybe a homemade three-course dinner for a loved one, a car wash and detail, a haircut or color, organization services, personal training lessons…the list could go on and on.

Holiday spending

Think about the person you are giving the gift to. Have they ever mentioned they would love you to teach them about or how to do something? Or perhaps they have mentioned wanting highlights but not being able to afford them.

Whatever it is, if you have the skill or talent then offering it as a gift is not only heartfelt and valuable—but also saves you money.

Use Rewards Points From Credit Cards

Many people these days have a credit card that offers rewards points or cashback for their purchases. If your card gives you cashback rewards, you can buy a gift and then apply the “cash” towards your credit card balance. Also, consider using your rewards points to buy gift cards.

Buy Discount Gift Cards

There are so many websites you can use to get discounted gift cards. Some of the websites I like to use to buy discounted gift cards are:

How it works is people sell their unwanted gift cards to the marketplace (you can sell your unwanted gift cards too), and you can then buy a discounted gift card for some of your favorite brands. You can buy an electronic gift card that is almost instantly emailed to you, and then print it out. Or you can purchase a physical gift card that is mailed to you—shipping is free.

Have A Potluck Dinner

Holiday spending

It can be overwhelming and expensive to cook every dish for the holiday season. In my family, everyone is responsible for bringing at least one dish. We discuss in advance who’s going to bring what dish so we can plan out our holiday menu. Asking your friends and family to bring a dish helps not only ease the financial burden, but also saves time cooking.

Saving For Your Holiday Spending

A great way to prepare for holiday spending is to save in advance. Therefore, I recommend you set up a sinking fund for every holiday you need to prepare for. A sinking fund is when you set aside money specifically for a major purchase or a bill. In other words, you are basically saving up a little bit of money over time so the expense doesn’t catch you off guard.

Holiday spending

The way you set up a sinking fund is you determine how much money you need for an upcoming expense. Then take that amount and divide it by the number of months or weeks you have until you need to spend that money.

For example, say you want to save $1,800 for Christmas, and Christmas is 6 months from now. Take $1,800 and divide by 6. You would need to save $300 per month for your sinking fund.

The figure you come up with will let you know how much you need to save every month or week towards that upcoming expense.

Here’s an example of a sinking fund I’ve set up for several things I was trying to save for in advance:

Personal Finance Binder

You can get a copy of this Sinking Fund Worksheet in my FREE Resource Library to help you set up your own sinking fund. If you want to learn more about sinking funds, read my article “What Is A Sinking Fund And Why You Need It?

Summary

Don’t feel defeated because you overspent during the holidays. You can recover from your holiday spending by first determining the damage. Once you know how much you owe, try to reduce that number as much as possible. You can reduce that amount by returning purchases, selling unwanted gifts, or using any extra money you receive and put it towards your debt.

Make a monthly budget to see what areas you can cut back on spending and have some extra money. Next, repay your debt by paying the highest interest debt off first. Finally, start saving for the holidays now so you are not in the same situation again next year.

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