It can happen to anyone: despite the best of intentions, you end up overspending during the holidays.
Even if you’re not a big Christmas person, it can be easy to get swept up in the magic of the season — the lights, the gifts, the delicious seasonal beverages.
It’s wonderful…until January hits and you come face to face with your credit card bill and ask yourself what the heck happened.
There’s good news, though: if you over-extend your budget during the holiday season, it is absolutely possible to get it back on track.
Here are three simple and effective things you can do.
Overspending during the holidays: what to do if you’re over budget
In June 2019, I wrote a post about things to do after going over budget.
At the time, I highlighted three steps to take: reflect on the past, plan for the present, adjust for the future.
Those steps still apply if you find yourself overspending during the holidays.
Here’s a breakdown on what each of those steps looks like and some guidance for how to get the most out of each step.
Reflect on the past
What happened? That’s the first question you need to answer after overspending during the holidays.
- Inventory your spending
Gifts, wrapping paper, baking supplies, gas for travel…there are a lot of different ways to spend money during the holiday season. Putting together an inventory serves as a way to get a big picture view of how you spent your money.
This is only useful if you approach it honestly. That means including everything on the list — even if you’d rather not. The more accurate and detailed your inventory can be, the better picture you’ll have of the overall situation.
Pro-tip: The best way to create an accurate spending inventory is to track your spending while it’s happening. Added bonus: tracking your spending means more opportunity to avoid going over budget by creating room to adjust. If nothing else, if you track your spending, you won’t be surprised if you do end up over budget.
- Identify problem and/or surprise areas
As you assess your spending, take note of things that stand out to you.
Maybe you spent more on baking supplies than you expected or the stocking stuffers came in a little higher. Or maybe you forgot to budget for certain areas, like wrapping paper or postage, entirely. These are good things to make note of when you do your budget inventory.
- Don’t beat yourself up
This is the most important — and challenging — part of the reflection piece.
Here’s the thing: while you might wish you could go back and change the past, what’s done is done. If you’re over budget from the holiday season, that money is spent and gone. And while there are benefits to reflecting for the purpose of doing better in the future, it doesn’t do you any good to beat yourself up.
Plan for the present
After reflecting on what happened, it’s time to figure out how you’ll adjust to account for overspending during the holidays in the present.
- Make a plan for getting back on track
While it’s certainly possible to overspend by accident, I’m skeptical about whether or not you can get back on track the same way. The first thing you need to do to bounce back after overspending during the holidays is make a plan.
A good place to start with this process is by looking at your existing budget and seeing what you can move around to make up the difference. This will also give you an idea of how long it will take to get back on track.
This leads to the next part.
- Stay realistic
It might not be possible to immediately bounce back from overspending during the holidays. Depending on how over budget you are and what your expenses look like, it might require more time — a few weeks, even a few months.
When you’re working on your plan for how to get back on track, be realistic about it. Best case scenario? You get back on track earlier than originally anticipated (which is not a bad place to be at all).
- Follow through
Plans only work if you do. You’ve made the plan, ensured it’s realistic — the next step is to put the plan into action.
As with the first point, a note here: while a realistic plan should make it easier to follow through, it’s important to remember to not be too hard on yourself. Sometimes even the best made plans don’t work out exactly the way you expect or want. It happens. What’s more important is doing the best you can with the circumstances you find yourself in. Remember: progress, even if it’s small, is still progress.
In this case, the outcome — getting back on track after overspending — is more important than the path there.
Adjust for the future
The third thing to do after overspending during the holidays is to determine what adjustments can be made to increase the odds of creating a better budget in the future.
- Be honest about what happened — and what it means for the future
Much like the inventory only works if you’re honest about it, so, too, does this step.
The goal here isn’t to shame yourself for things that have already happened — it’s about looking at the past with a “how can I improve moving ahead” mindset. The more honest you can be about what happened, the better equipped you will be to determine what the implications are for the future.
- Adjust accordingly
You’ve done all the work of determining what happened — the next step is to put it into action and actually start making the changes. This might not be easy — especially if you determine there are a lot of adjustments that need to be made. Keep your eye on the prize: a holiday budget that will better meet your needs (and result in less stress after the season is over).
- Be open to change
I have always been of the belief that the best budgets are living documents. I’m sure there are some who would disagree with that position. That’s OK! But in my experience, the more rigid I try to be with my budget, the faster it develops holes.
If you’re adjusting your budget after overspending during the holidays, I encourage you to be OK with the idea of change. It’s not always easy, but that doesn’t mean it’s bad, either.
Even the best budgeters out there can end up overspending during the holidays.
Going over budget isn’t the goal, but it’s also not impossible to bounce back. Taking time to reflect and create a plan can help you get back on track today and into the future.
Have you ever gone over budget during the holiday season? What did you do to get back on track?