Money: How to recover after the holidays

The decorations are back in the basement, the gifts have finally found homes, and the family is getting back in the post-holidaygroove. Just one final festive tradition remains: opening that January credit card bill.

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Not your idea of seasonal cheer? You’re hardly alone. After months of pulling out the plastic to pay for the year’s hottoys,teacher gifts, holiday nibbles and dozens of last-minute extras, it’s little wonder that January’s financial reality check brings all that glee to a crashing halt. In fact, one-third of Canadians spent more on the holidays in 2012 than they intended — by an average of $463 — according to RBC’s 2013 Post-Holiday Spending Poll.

But how does an already cash-strappedfamilyclimb its way out of the black hole of holiday debt? Return everything? Fortunately, there are less extreme ways to manage repayment without resulting in years of therapy for your kids — and they could put you on the right financial track for the long haul. (Though if some of those gifts sit untouched for weeks, maybe taking them back is worth considering!)

Get real about your paymentsSit down and tabulate the damage; looking that number in the eye can take the fear factor out of the equation. Then decide on a goal. If you want toget out of debtbefore next December, you’re more likely to succeed if you make more than the minimum payment each month. Here’s proof: If you put $1,000 in purchases on your credit card with an 18-percent interest rate, and only make the minimum payment of two percent each month (most credit cards require you to make a monthly payment of between two and three percent of your balance), it would take you eight years to pay it off. Plus, you’ll pay $863 in interest. If, however, you were to throw $100 a month at the bill, you would be debt-free in 11 months and pay only $92 in interest.

Bring in more moneyMaybe betweendaycare costsand sky-high heating bills, your currentbudgetjust can’t stretch far enough to make extra payments. Finding a way to bring in some additional cash might be the answer.

有卖吗?克里斯汀•希克斯a mom from London, Ont., takes part in year-round mom-to-mom sales. These groups rent community rooms for a day and you pay a small fee to rent a table, then load it up with items you want to sell. Snowsuits and gently used toys are a big hit, says Hicks. Go to Facebook and search “mom to mom” plus your community’s name to find one taking place near you, or check Kijiji or community notice boards. You could also drag out other household items collecting dust in storage (hello, yogurt maker!) and sell them online.

Jeanine Moyer, a Fergus, Ont., mom, decided to moonlight to help her family stay in the black. She works for an agriculture company by day and is a freelance writer by night. Her husband takes on extra jobs, like mowing lawns, to give their budget some breathing room.

Don’t forgettaxrefunds, work bonuses and salary increases. Rather than treating them like windfalls, use that “found” money to pay down debt.

Save up to pay upIn the RBC poll, most people surveyed planned to get their debt under control by cutting back on day-to-day expenses such as groceries, phone plans and entertainment.

Food is a great place to start, as it’s one of the few expenses largely under your control. Price matching andcoupon clippingare a given, but here’s something you may not have considered: Think twice before buying items placed at eye level at the grocery store. The best deals are often found on bottom shelves. Or split bulk purchases with a friend to take advantage of wholesale prices. (No one needs two litres of vanilla extract!)

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But the hands-down best way to save money on food? Eat what you buy. Studies show that Canadians waste a whopping 40 percent of their food, worth $27 billion each year, with just over half being ditched by households. Dig around the pantry and deep freezer. You may be surprised at how much you’ve purchased and forgotten about.

其他方法来节省几块钱?不要忘记便宜entertainment. Eat a big lunch before going to a matinee (which may be less expensive than an evening movie) to avoid costly snacks, or enjoy freewinter activitieslike skating, sledding and hiking. “We come home, make hot chocolate with whipped cream and the kids are really happy,” says Jaime Damak, of Sherbrooke, Que.

Know your triggersEveryone has a different reason to overspend during the holidays: excitement, guilt, that desire to see your kids’ faces light up, and keeping up with the Joneses. To tackle your triggers, picture the toy you’re about to buy lost in a heap on the floor, or remember that most kids won’t even remember who gave them what — especially if the focus is on quantity over quality. Try to figure out your motivation for purchasing: Are you buying something meaningful or just more “stuff”? Andrea Kotekar, of Toronto, uses this tactic: “Instead of telling myself I can’t buy it, I tell myself I can buy it, but later. Nine times out of ten, the desire disappears.”

Charmead Schella, of Port Alberni, BC, has learned that money doesn’t make the memory. Beforekids, she thought nothing of dropping a wad of cash on presents for the holidays — a backlash against her frugal childhood. “Watching my mom stress about money took away from the fun and buoyancy of the season,” she says. But after she had her first son, money became tight, and Schella discovered she could scale back on spending without losing the festive spirit. She and her husband decided to make many of their presents, spending a fraction of what they used to. Now the parents of two boys, they’ve continued the tradition, making each other jewellery boxes and books, and they gift one another massages and dinners cooked before the other gets home from work. Sons Angus and Beck have gotten in on the act, crafting jewellery for their mom.

Read more:10 healthy dinners for the New Year>

“We have turned the holidays around to make them about surprise, effort, love and thought, not money,” she says.

Hicks thinks like a kid during the holidays to help stay out of debt. “My daughter is three,” she says. “She doesn’t care if she gets one toy or 25 toys. I try to remember that she’s just excited it’s Christmas.”

Which debt should you pay off first?To slash debt quickly, try “snowballing”: Pay the bill with the highest interest rate first, while paying the minimum balances on the rest. Once the first debt is paid, roll that money into repayment on the next one. Repeat.

You better watch outWomen in particular have a hard time reigning in spending during the holidays, says Alison Konrad, a professor of organizational behaviour at Ivey Business School at Western University in London, Ont. “Women are much more likely to spend money freely on other people than on themselves,” she says.

Stop the cycleHow will you handle next year’s spend-fest? Even if you’re still paying off debt, start saving now, so you don’t find yourself in the same position this time next year. Putting away just $10 a week adds up to about $500 by December.

Your seasonal savings plan:* Set a holiday budget and include sneaky expenses like entertaining, alcohol, tips and stocking stuffers; * Give handmade gifts to teachers and neighbours; * Place cash into separate envelopes for each person on your list, and stop when it’s gone; * Be honest about what your child actually needs. A mountain of gifts for a one-year-old? Maybe not.

A version of this article appeared in our January 2014 issue with the headline "Holiday recovery," pp. 42-3.