Financial Hangover?

Posted January 2nd, 2018

Everyone I know seems to have a cure for a hangover. Ibuprofen, a raw egg in a glass of orange juice, a huge, greasy breakfast, lots of water, black coffee. I had a college roommate who swore spraying Febreze on your clothes the next morning was enough to bring you back to life after a night of overindulgence.

But how do you cure a financial hangover?

Many of us are guilty of overdoing and overspending on the holidays. And we’re left with credit card balances that look terrifying in the sobering January light.

At least with a typical hangover, if your attempts to alleviate the pain don't work or you simply don't fight it, the misery will end sooner rather than later. Doing nothing when you have a financial hangover can make your situation worse (your debt will grow), and even if you try to immediately cure it, the effects can last for months.

So if you spent a little too much leading up to the holidays – or went way overboard – here are some options to help you undo the damage.

Utilize your credit cards
Sure, they were the ones who got you into this mess, but if you play your cards right (HEY-O), they can also help you out of it. A Balance Transfer is the process of transferring credit card debt from multiple cards to a single, lower interest card. Not only does this allow you to minimize monthly interest rates, and pay more toward the principle you owe, it simplifies your financial life. No more keeping track of multiple payment dues dates. No more accrued late fees.

Avoid shopping
Post-holiday January sales can be enticing. Especially if you see items you’ve had your eye on begin to be marked-down. But these are going to be lean days. If it’s not an absolute “have to have” item, it needs to wait until you have your financial feet back under you.   

Do your taxes now

Another cure for your post-holiday financial hangover might be a sizeable tax return. Put as much of it as possible toward your credit card debt and anything left over towards savings.

Incorporate your debt into your other resolutions
This is a time of year when you may be making all kinds of resolutions, both personal and professional. Consider making a savings plan part of the New Year, New You. Where can you save money? Where can you cut expenses? How can you apply more of your earnings to pay off credit card debt?

It may feel overwhelming right now, but with some strategic planning and mindfulness, your financial landscape really can improve. You aren’t alone.