How to Recover From Overspending on Vacation
The holidays come with a hefty tag. All the gifts, travel, food and entertainment can quickly drain your bank account. While precious vacation memories are worth spending money on, now that the holidays are over, it’s time to get your finances back on track. Here are some tips for recovering from holiday overspending.
To make a plan
As always, your first step is to look at the person in the mirror. Create your budget and take a close look at your financial situation. This may be the most sobering part, but you need to tally up how much you spent over the holidays so you know exactly how big a hole you need to fill. Review your credit card and bank statements carefully for details. (Here’s my guide to conducting a self-expense audit .) Hey, maybe it’s not as bad as you think! Or maybe it’s worse. Either way, you need to know.
Let’s start using a budgeting app
Apps like YNAB and Goodbudget (RIP Mint!) can help you create a budget, track your spending, and set money-saving goals. The visualizations and notifications they provide will keep you focused and motivated. Check out the best budgeting apps based on whether you’re a saver or a spender , and choose one that lets you easily see exactly where your money is going so you can identify areas where you can cut back on spending.
Return of gifts for cash
I know etiquette can be dicey, but I’m a firm believer in returning gifts for cash if you simply can’t use them. Personally, when I screw up and give someone something they don’t want, I’d rather they at least get some money out of it rather than leave it to fester on a high shelf in the closet, causing them to resent me and thereby tarnishing our relationship forever. Pretty obvious.
So go ahead and take your unwanted gifts back to the store to return them for a refund. Try to find a gift receipt to make returns easier, but there is often a way to return items even without a receipt . Just make sure you return unwanted holiday gifts as early as possible , and if the store won’t take them back, consider selling the items on Craigslist, Facebook Marketplace or eBay. Every little bit you can give back helps your financial recovery.
Return unwanted purchases (and don’t get scammed by defective items)
If you’re feeling bad about a gift you didn’t give, or bought a few gifts for yourself during the holiday shopping and now regret it, remember that many retailers have generous return policies after the holidays. You can return or exchange unused gifts in their original packaging. Then again, you may not even need a receipt.
If you received a defective gift that needs to be returned, that’s a different story. The good news is that you have more consumer rights than you think. The Bad: Some manufacturers will actually make you fight for them. Hopefully the company will honor its guarantee, but if not, you may have to take over the dispute resolution or send a demand letter. And if you’re struggling to get a response, do it publicly. Post on the company’s Facebook page or tweet your complaint. (Hey, it works for airlines .)
Cut your budget and stick to it
Now it’s time to look at your monthly budget and identify areas where you can cut back until you break even on your vacation expenses. For example, you can eat out less, limit your entertainment spending (who wants to go out in January?), cut back on miscellaneous expenses, and pause non-essential subscriptions. The goal is to cut discretionary spending, and even a small cut of $5 to $10 per category will make a difference, or at least give you a sense of control after the holiday frenzy.
Getting back on track financially after a nice vacation takes willpower, especially if you’ve racked up more debt than you planned. But with some planning and restraint, you can bounce back after this. And next year, try to make the holiday season more than just a cash grab. You can stay purposeful with your spending while maintaining the spirit of the season.