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Like millions of other consumers, perhaps you overspent during the holidays. Or maybe you spent just as much as you thought you should—but that amount was not compatible with what you actually had in your bank account. A giant monthly credit card bill is not the holiday memory you want to carry into the new year, so it's time to create a recovery plan. Here are seven ideas for cutting expenses, raising a few dollars and shaping up your finances for the year ahead.
1. Cash In a Few Vacation Days
Americans left 768 million vacation days unused in 2018, according to a survey by the U.S. Travel Association—and that was before the pandemic nixed many travel plans for 2020. Taking a vacation is great for your mental health, so don't rob yourself of all your paid time off. But cashing in a few of the vacation days you didn't get to luxuriate in this past year could help mitigate your holiday spending.
2. Rent Out Your Car
If you have an extra car in good condition, you may be able to rent it out on a carsharing platform like Turo or Getaround. Although you'll have to clean and maintain your vehicle (check out the guidelines on each site), you can set your own availability and pricing. Don't have a car? You may be able to rent out your empty garage space on Neighbor or Spacer.
3. Get a Side Gig
Thanks to the gig economy, it's now easier than ever to make a little money fast by doing extra work. Drive for DoorDash, Uber or Lyft. Find a temporary job on Indeed or ZipRecruiter. Get freelance work on sites like Upwork and Fiverr. Look for odd jobs on TaskRabbit or Thumbtack. Sign up for babysitting on Care.com or petsitting on DogVacay. Doing side work doesn't have to be tedious. In fact, it can be a great outlet for outside interests. Connect with your inner educator by doing some tutoring or get some aggression out by doing a few hours of demolition work—all while paying off holiday debt.
4. Sell Things You Don't Need
While most of us have small items like clothing or shoes we can sell on Poshmark or eBay, many also have larger items—cars, bicycles, patio furniture or computers—that could be making cash and freeing up space. Stop tripping over that workout equipment in your garage and help it find a new life gathering dust in someone else's home, while you rake in extra cash.
5. Renegotiate Your Monthly Bills
It's easy to put monthly bills on autopilot—literally, if you set up automatic payments. But many of those bills may be worth a second look. If your credit is good and your job is steady, refinancing your house or car loan may be a money-saving option. Though you'll need great credit to qualify, a balance transfer credit card with a 0% intro APR may help you lower your interest costs—and your monthly credit card bill. Consider switching cable TV, internet or mobile phone providers. Look into ways to save money on home or auto insurance. And consider canceling monthly subscriptions you don't use much. Paring down your monthly expenses can help you recover from holiday spending—and it can also improve your finances over the long term.
6. Consider a Debt Consolidation Loan
If your holiday credit card bills seem insurmountable—or if they tipped an already large debt load over the top—a debt consolidation loan could help you save money on interest and give your repayment plan some structure. A debt consolidation loan is a type of personal loan, so you'll pay it back in regular installments over a set period of time. Debt consolidation loans typically feature lower interest rates than credit cards do, and they may even help your credit score by reducing your credit utilization rate. You can read up on whether a debt consolidation loan is right for you and find a list of loan options customized to your credit profile with Experian CreditMatch™.
7. Prepare for the Next Holiday Season
Ideally, a few months of belt-tightening, creative fundraising and budgetary discipline will put you back on track financially. Now consider taking a few proactive steps to take the financial pain out of the holidays to come:
- Set aside a few dollars a month for holiday spending. Even if you save half of what you ultimately spend, you'll be ahead of the game.
- Pay down debt and keep your credit in good shape. It's far easier to create a post-holiday payoff plan when your credit starts the season in a good place. Don't forget to monitor your credit to protect against holiday (and year-round) identity theft.
- Cultivate good money habits throughout the year. Stick to a budget, eliminate money wasters, build up your savings—these everyday practices can make the holidays even more festive by creating room for extra spending without ramping up extra stress.