Like many people, December is typically the most expensive month for me. Apart from spending on gifts for friends and family, there are usually more parties and gatherings to attend (i.e additional spending on dining out, cabbing, and party outfits). Plus, all the stores will be having massive sales, which just adds to everybody’s “spend, spend, spend” frenzy.
New Year’s Eve isn’t even here yet, and I’m already beginning to feel the pinch in my bank balance. A financial intervention is definitely in order. It won’t be fun, but at least it’ll ensure we won’t start 2014 with a dark financial cloud hanging over our heads. Here are some tips on how to recover from a season of overspending:
Step 1: Figure out what went wrong
After the hullabaloo of festivities have died down, find a quiet moment where you can sit down to closely examine your expenses for the month. Look through your receipts – did you buy expensive gifts for friends just so you won’t “look cheap”, or perhaps you went a little crazy at the post-season sales? Whatever it is, identifying your weak spots will help you not make the same mistake in future.
Step 2: Implement a spending freeze
A drastic measure would be to lock all your credit cards in a drawer, and hand the key to a trusted friend or family member. That way, you can only work with the cash you have on-hand, and won’t rack up any additional debt. If that’s too difficult, you’ll need to work out what are the non-essential items you can cut out from your expenditure – for example, dining out or taking cabs everywhere you go. Come up with ways on how you can cut back over the next three to six months, and channel these extra cash to paying off Christmas debt. (Bonus: if you stick to this frugal behaviour, it may very well translate to a long-term behaviour pattern!)
Step 3: Find ways to earn some cash, quickly
Do you have barely-worn clothes and shoes lying around the house, simply collecting dust? Dig them out, gather a group of girlfriends, and hold a mini flea market at your place. You probably won’t earn much, but at least it’ll give you some extra liquidity. Alternatively, if it’s feasible, you can also consider taking on a temporary weekend job – just a few hours every weekend can be helpful in easing your financial burden.
Step 4: Prevent future overspending
This ties in with the first step. A lot of us over-spenders tend to be in denial when it comes to our spending habits. In fact, this denial exacerbates during the holiday season. According to an ongoing study done by researchers at the University of Sheffield, people tend to put thoughts of losing weight or saving money at the back of their minds during the holiday season. In an interview, the lead researcher on the project, Dr Thomas Webb said, “Avoiding monitoring may allow people to escape from negative feelings associated with an accurate appraisal of progress. For example, people might not want to know how much money they have spent or what their partner thinks of their social skills. We call this motivated inattention.”
However, it’s important that we get real with ourselves, and not remain in this state of denial. Apart from identifying our financial weak spots (and avoiding them), it’s also prudent to work out a simple budget that we can stick to. In upcoming posts, I will be touching on how we can break out of our dysfunctional relationships with money. Do keep a lookout for those!
About The Author: Vanessa Tai is a founder of Material World who has previously worked on magazines Simply Her and Cosmopolitan Singapore. Now a freelance writer and a full-time contributor to this website, the 26-year-old dreams of attending every single major music festival before she turns 30. Follow her on Twitter @VannTaiTweets.
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