This blog considers how you can recover financially after Christmas. The festive season is a magical time filled with twinkling lights, family gatherings, and the joy of giving. But for many, it can also bring a hefty dose of financial stress. From gift-giving expectations to extravagant meals and decorations, the pressure to create a “perfect” Christmas can lead to overspending – and a financial hangover in the New Year.
If this sounds familiar, you’re not alone. A survey by Mind found that nearly one-third of people with mental health challenges feel overwhelmed during the Christmas period, and 41% report getting into debt. Let’s consider some scenarios and explore why this happens, and, most importantly, outline actionable steps to help you recover financially and regain peace of mind.
Real-Life Struggles with Festive Finances
Does this sound like you? Christmas is so insanely anxiety-inducing because of feeling the need to buy presents for so many people. I’m terrified that spending beyond the basics will leave me unable to pay essential bills. I hate how ‘cheap’ I’ve become – not because I don’t care about others, but because of the extreme guilt and anxiety………..
Every year, I overbuy. We already have enough stuff, and now I’m going to be skint for ages. As a lone parent, I worry that I’m overcompensating…………
These sentiments highlight the emotional toll of Christmas spending, which can stem from societal pressures, guilt, and the desire to make others happy. Additionally, for some, particularly those with mental health challenges like depression or bipolar disorder, this can escalate into “crisis spending” – an emotionally driven behaviour that causes financial harm.
The Financial Fallout
When the decorations come down, reality sets in. The January blues are often accompanied by the arrival of bills and mounting debt, therefore, for those already dealing with mental health issues, tackling these problems can feel insurmountable. Difficulties with planning, communication, and organisation – common symptoms of mental health challenges – can undoubtedly make managing finances even harder.
Meanwhile, there is hope. By taking proactive steps, you can recover from the financial strain of Christmas and subsequently build healthier money habits for the future.
9 Steps to Recover Financially After Christmas
1. Stop the Cycle: Cut Up the Credit Card
If you’ve relied on credit cards for Christmas spending, it’s time to stop further use. Surprisingly, on average, Brits spend £342 on credit cards at Christmas, therefore, focus on paying off this debt instead of adding to it.
2. Consider a 0% Interest Balance Transfer
If your current card’s interest is piling up, transfer the balance to a 0% interest credit card because this can give you breathing space to pay down the debt without incurring additional costs.
3. Set Realistic Goals
Decide what you want to achieve financially in the next year, whether it’s paying off debt or saving for next Christmas. Break these goals into manageable steps and reward yourself for milestones along the way.
4. Sell or Return Unused Gifts
If you’ve received duplicate or unwanted presents, consider returning them or selling them online to recoup some cash. Additionally you could also declutter by selling items you no longer need, like old gadgets or toys.
5. Create a Budget
Track your income and expenses to understand where your money is going. Use this information to set a realistic budget instead of sticking your head in the sand. For next Christmas, consider agreeing on spending limits with family or opting for a “one gift rule” or alternatively, doing a secret Santa.
6. Find Cheaper Alternatives
Reviewing your regular expenses and looking for ways to save explicitly holds you accountable. Compare energy tariffs, switch to a more affordable supermarket, or cut back on non-essentials like takeaway meals and coffees.
7. Cut Back on Luxuries
Small changes can make a big difference. Consider:
- Reducing cigarette, alcohol or take-away consumption.
- Cooking at home instead of eating out.
- Host social evenings with friends at home.
8. Plan Early for Next Christmas
Start saving now to avoid a repeat next year. Set aside a small amount each month, join a supermarket voucher scheme, or take advantage of post-Christmas sales to stock up on discounted gifts, wrapping paper and Christmas cards. Make a list of people that you will buy for next year and consider buying one present per month throughout the year, this way you don’t have so much to buy in one go and you may find things that are not necessarily available at Christmas and are more unique.
9. Prioritise Your Well-Being
Financial stress can take a toll on your mental health. Make time for self-care and don’t hesitate to reach out for support. Organisations like Mind and the Samaritans can provide a listening ear.
Resources for Help
If you’re feeling overwhelmed, don’t hesitate to seek expert advice. The Money Advice Trust’s ‘Peace of Mind’ campaign encourages people to address debt issues early. Debt advice can help you create a repayment plan, identify benefits you may be entitled to, and provide reassurance that you’re not alone.
Check out these resources:
- Money Advice Trust: Free financial tools and advice.
- Step Change Debt Charity: Personalised debt management plans.
- Mind: Mental health support during financial stress.
A Fresh Start
Christmas is a time for joy and connection, but it shouldn’t come at the cost of your financial or mental well-being. By taking proactive steps now, you can recover from Christmas overspending and build a sustainable financial plan for the future. Remember, it’s not about perfection – it’s about progress.
Here’s to a New Year free from debt and full of possibility!
