Holiday mode: It’s a carnival of travel, parties, and gifts. Then suddenly it’s January, and it all catches up with us. We’re left thinking,“What just happened? Where am I? Where’s all my money?”
If you went over budget this season, give yourself some grace and don’t panic. We’ve all spent more than we intended to at some point. Now’s the time to regain control over your accounts. These tips will help you reset your money and mindset after the holiday spree and start the new year off on the right financial foot.
When you’ve been spending a lot, it’s tempting to avoid looking at the exact numbers of your balances and transactions. Instead, we play the “out of sight, out of mind” game. If you don’t know the total, then it’s just a vague sum floating somewhere in the universe that you don’t have to pay attention to — especially if you put those expenses on a credit card with a huge limit. But you know you’re only delaying the inevitable. That very real number is still waiting for you, and avoiding it creates more stress the longer you keep ignoring it.
The key is to start by facing the facts. Take a deep breath and log in to your bank account. Look at your bank and credit card statements. Take inventory of any financials that you’ve put on the back burner over the past few months. If you racked up any debt, make sure you know exactly how much. Looking at those numbers might make you uncomfortable, but the truth really does set you free and gives you a starting point so you can get back on track.
Budgeting is the best way to take control of your money, no matter what time of year it is. As someone who’s a natural spender, let me tell you — I was super against the idea of budgeting at first because I didn’t want to feel restricted. But once I got the hang of it, I realized that knowing exactly how much money I can spend in each area of my life (and how much I’ll have left) actually gives me permission and freedom to spend that money. No more guilt around shopping. No more feeling out of control.
Maybe you typically follow a budget but got a little lax about it over the holiday season, or maybe you’ve never made a budget in your life. Either way, now’s a great time to fire up that zero-based budget (a budget where your monthly take-home pay minus all your expenses equals zero) and go all in. The easiest way to do this is by using a simple budgeting app — my favorite is EveryDollar — that does most of the work and math for you.
If you follow the Ramsey Baby Steps, the first step is to save a $1,000 emergency. And true to its name, the emergency fund is supposed to be for emergencies only, but sometimes people dip into it for gifts and other shopping if the holiday season snuck up on them. Let the new year be your chance to rebuild that emergency fund, or to start building one, so you can have a solid foundation before moving on to bigger financial goals.
The 7 Baby Steps are Dave Ramsey’s proven plan for paying off debt, saving money, and building wealth. No matter where you’re at with your finances right now, you can follow these steps to take control of your money and leave a legacy for generations to come! Here’s a quick breakdown:
For an in-depth look at each of these steps and what you can do to make them happen, go to ramseysolutions.com.
If you racked up any debt over the past couple months, don’t cost yourself more by waiting to pay it off and letting that interest build up. Start this year with a clean slate and pay it off as fast as possible! Whether you have a couple credit card balances or thousands of dollars in student loans, the method I recommend for paying them off is the same. It’s called the debt snowball method, and here’s how it works:
This process allows you to get some small wins right off the bat, and those small wins create momentum that keeps you motivated until the last cent is paid off.
This might sound a little crazy, but hear me out. I’ve tried this myself, and a no-spend challenge can be a great way to hit the reset button on your spending habits. It doesn’t mean you need to lock up your cards and wallet and throw away the key, but it does require you to focus on only the essentials, like food, utilities, housing, transportation, and necessary monthly payments. Skip all the extras. You can even turn this into a game for your family. Stick a calendar on the fridge, color in a square for every day you don’t spend money, and get some kind of budget-friendly treat to reward yourselves when you finish the challenge. You’ll be amazed by how much you can save in just one month.
Following this plan enables you to start the year in the driver’s seat with your finances. Because let’s be real: You work hard for your money, and you deserve to be the one in charge of it without all the stress, confusion, and anxiety. Get out there and have an amazing year of hitting all your goals, financial and otherwise!
Need help finding extra money in unexpected places to put toward your emergency fund or pay off debt? Check out Rachel’s 14-Day Money Finder challenge at ramseysolutions.com/moneyfinder. Learn more about Rachel and her upcoming events at rachelcruze.com and follow her on Instagram @rachelcruze.
