Money Matters: Did you overspend during the holidays? Here are 7 ways to get back on track in the new year
We’ve all been there: You start buying a few items on your list, you get going on a spending spree and — before you know it — you have burned a large hole in your wallet, and you don’t know how you are going to mend it. This is an especially easy trap to fall into during the holiday season, when giving gifts, hosting parties and doing extravagant activities are big parts of the celebration.
Not to worry, though: If you spent over your budget this holiday season, you can look forward to a new year and fresh start in 2023. Here are seven things you can do when starting out the new year to recover from overspending and get your finances back on track:
Don’t purchase immediately
Have you ever really wanted something, put it on your list and then wondered weeks later why you ever thought you needed to get it in the first place? Set a rule that, before you buy something (other than the essentials), you will wait a week before actually buying it. This helps avoid impulse purchases that you might regret later on. And sometimes, simply waiting a few days helps you evaluate whether something really is necessary.
Try a spending fast
Another strategy is to do a spending fast. That is, to go a set amount of time — perhaps a month or two — without buying anything that is not essential. Essential items should be limited to things for your basic survival and comfort, like food, rent, hygiene supplies and gas. Things like clothes, makeup and electronics can be considered essential only if an item you already have runs out, breaks or gets lost.
You will be surprised how much money you can save by doing a spending fast — it may even affect your spending habits for good!
Keep a “needs vs. wants” list
Even if you don’t do a strict spending fast, merely keeping a “needs vs. wants” list can help you prioritize what you do spend money on. See the list here for examples of things that might be considered needs vs. wants. Once you identify what is necessary and what is not, you can limit how much you spend on things that are not essential.
Cook at home
Eating out eats away at your wallet. It’s surprising how much money you can save by cooking your own food at home — up to $1,000 per year!
To save money in 2023, start a habit of regular meal planning and home cooking. Planning your meals efficiently will also help you avoid buying food you don’t need and avoid wasting food that doesn’t get used. Plus, you will likely eat healthier and feel better as a result!
Track your spending
Often, just writing things down helps you to be more intentional about your behavior. If there is no tracking, there is no accountability for spending too much.
There are plenty of great apps for tracking your spending, which often include budgeting and other financial management features. Get in the habit of tracking your spending and following up on how well you are meeting your financial and budgeting goals.
Start a side hustle
If you are still trying to recover the money you overspent, consider doing a side hustle to make some extra cash. There are tons of ways you can make money on the side, but a few ideas that are proven effective include becoming a rideshare driver, delivering for an online food order service, designing and selling T-shirts, tutoring online, walking dogs and participating in paid surveys or studies. Finding creative ways to make money in your spare time can help replenish your wallet.
Find other sources of happiness
One of the most effective ways to cut back on spending is to remember the old adage “Money can’t buy happiness.” Reduce unnecessary spending on things you think might make your life better by looking for happiness in other, more worthwhile ways — whether that is spending more time with friends and family, participating in inexpensive hobbies, spending time outdoors and in nature, supporting a cause or any other activity that you find fulfilling.
If you dug yourself into a financial hole this holiday season, you don’t have to stay there. Try out these seven ideas to get yourself back on track saving money. It’s a new year and fresh start, so take advantage of this opportunity to set goals and make needed changes in your financial habits. Your bank account will thank you!
Sarah Romney is a project manager at Stage Marketing, a full-service content marketing agency based in Provo.