Saving & Spending

5 tips to get you back on track

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The holiday season is the most expensive time of year for many families. Mastercard’s SpendingPulse report found that retail holiday spending, both in store and online, went up year over year. Online retail spending alone grew a sizeable 18.8 percent compared to 2018. With expensive gift purchases, holiday travel, larger grocery bills preparing for family meals and all of the other expenses that accompany the end of the year, it’s easy for anyone to get off track with their budget.

If you overspent during the holiday season, the beginning of the year can be a stressful time as you attempt to pay off debt and realign your finances. Here are a few tips to help you recover from the holiday spending season:

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Make a plan

First things first. You need an action plan to get back on track. Sit down and note how much you owe across accounts, the associated interest rates and how much you need to budget over the next few months in order to pay off any credit card debt. You can use a Credit Card Payoff Calculator to play with payment plans that help you minimize interest charges while not overwhelming your 2020 budget. There are multiple methods for paying down credit card debt, so it’s important to choose a plan that works for you.

Check out TPG’s guide to paying off credit card debt. 

a person sitting on the floor: The first step in recovering from holiday overspending spending is making a plan to pay down debt and get back on track. (Photo by Rawpixel/Getty Images)© The Points Guy
The first step in recovering from holiday overspending spending is making a plan to pay down debt and get back on track. (Photo by Rawpixel/Getty Images)

Pay more than your minimum payment each month

Credit cards allow you to pay off debt in small chunks at a time. Even though you may owe thousands of dollars on a credit card, you’ll only be required to pay a small portion of that each month. While it can be tempting to simply pay that minimum balance each month, it will cause more harm in the long run.

Making larger payments each month helps you get out of debt faster, but it also minimizes the amount of interest you have to pay on your debt. That could mean hundreds or even thousands of dollars in savings by the time you pay down your cards.

Use apps and tools to your advantage

You don’t have to use a pen and paper to manage your finances. Online tools and money management apps can help you automate bills, track spending and stay on budget while you pay down debt. I personally use Mint to keep my bills and spending under control, and I have as many bills set to autopay each month as possible. However, there is a wealth of apps out there that can help you accomplish your specific goals.

Check out TPG’s guide on the best apps for money management.

a woman using a phone: Apps like Mint can help you keep your budget on track as your recover from the holiday spending season. (Photo by d3sign/Getty Images)© The Points Guy
Apps like Mint can help you keep your budget on track as your recover from the holiday spending season. (Photo by d3sign/Getty Images)

Consider a balance transfer card

Typically, the answer to credit card debt is not opening another credit card. But in some circumstances, balance transfer cards can help you save on interest payments when used appropriately. Balance transfer cards allow you to consolidate debt across multiple cards. Most come with an introductory period where you won’t have to pay interest for a certain number of months on balance transfers (though they do charge a percentage fee for each transfer), as long as you pay off your debt within that timeframe.

The Citi Simplicity® Card, for example, gives you a 0% APR on balance transfers for 21 months from the date of first transfer. All transfers must be completed in the first four months. After that 21 months, a variable APR of 16.24% to 26.24% applies. You’ll pay a 5% balance transfer fee ($5 minimum) on any debt consolidated onto the card. If you pay off your debt within the 21-month timeframe, you avoid all interest payments. However, if you do not pay off your debt within those 21 months, the variable APR will apply to any remaining balance.

Check out TPG’s guide on the best balance transfer credit cards. 

Follow the 10 commandments for rewards credit cards

Once you are back on track for 2020, make sure you are following all of the best practices for your rewards credit card strategy. This means only spending what you can pay off at the end of each month (rewards cards come with notoriously high APRs), making sure to never miss a payment and maximizing your points and miles.

Check out TPG’s 10 commandments for travel rewards credit cards. 

Bottom line

If you accidentally overspent your budget this holiday season, you aren’t alone. It’s easy for spending to snowball at this time of year, but there’s no time like the present to get back on track. Make a plan to avoid interest payments and pay down debt as soon as possible while minimizing the headache of a holiday spending hangover.

Featured photo by Portra/Getty Images.

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Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.


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