Despite my best intentions, year after year, the holiday season is a time when I lose track of two things: my diet and my finances. Much like my waistline, my credit card bill swells during this time.
And just when I think my budget (not to mention the button on my poor jeans) can’t take anymore, the festive season comes to an end and I have to readjust to the brutal reality of everyday life. However, I know from experience that the “readjustment period” isn’t always so easy.
My husband and I have learned the hard way that it’s important for us to sit down right at the beginning of the year to regain and renew our focus on proper money management. Here are a few of the tips and strategies that we use to get our finances back in order and get our financial ninja on after the overspending marathon:
- We review our budget
- Pay outstanding bills
- Set financial goals
- Instill accountability
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1. Budget Review
My husband and I always begin by sitting down with each other and going through our budget with a fine-tooth comb. We talk about what worked well for us this past year and what we think we can do better this year. And, obviously, we make any necessary changes.
For example, in just a few weeks, we’re closing on a piece of land that we’re purchasing to eventually build a home on.
Paying off the lot will increase our monthly expenses fairly significantly, so we needed to update our budget to reflect that.
Taking the time to do this gives us a clear picture of our current financial health, which is helpful for the next steps.
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2. Outstanding Bills
We also like to feel like we’re starting the brand new year with a clean slate. And while it’s impossible for us to pay off all of our debts at one time (that’d be nice, though, wouldn’t it?), we do like to take care of any of those smaller expenses that we swore we’d pay off after our holiday break.
We make sure to pay off any outstanding charges (including those remaining holiday expenses that we put on the card) right at the beginning of the year.
This way, we start the year with a $0 balance.
We’ll also handle any lingering medical bills, car repairs, and other unexpected expenses that popped up.
Getting all of that out of the way helps us feel as if we’re starting fresh with a completely accurate budget, inspiring us to enter the new year with a brand-new focus on our finances.
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3. Financial Goals
My husband and I are big believers in setting goals, whether they’re personal, professional, or financial. So needless to say, setting some money objectives is another one of those things we do right at the beginning of the year. This year, we've decided to place the majority of our focus on paying down debt.
We worked out a plan to pay off the rest of my car loan early in the year, and then we’ll begin chipping away at our student loans throughout the months that follow.
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4. Accountability
To meet our goals, both of us need to stay on the same page throughout the whole year. Sometimes that takes some friendly reminders when one of us is about to fall off the wagon.
My husband and I make a promise that we’ll hold each other accountable when one of us does something that doesn’t fall in line with our plan – and that we’ll do so without getting angry.
Sometimes I’ll even loop a family member — typically my mom — on our financial plans for the year so that she can say something when I’m about to spend irresponsibly.
Ideally, each of us would have the inner wherewithal to stick to our plans without any prodding or prompting from others. But we’re realists, so we know that setting up a system for accountability is important for us.
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Final Thoughts on How to Become a Financial Ninja
The sudden shift from the holidays to everyday life can be a brutal one. Luckily, these strategies have proven to help us recover from the holiday overspending hangover and prepare for the rest of the year with a clear head.
