Most of us head into the holidays with the best of intentions. This year, we won’t eat so much, we’ll try to drink less and, by golly, we’ll stick to our budgets. Well, we’ll try...sort of. Unfortunately, avoiding overindulging at a time when so many types of excess are encouraged can be a real challenge. According to a survey conducted by Mobilicity in November, 58 percent of Canadians say they spend more than they should during the holidays, and one in five identified themselves as “binge shoppers.”
Fortunately, there’s always a tipping a point where you can no longer deny that you’ve gone too far. You’ve overstuffed your stocking, your stomach and your shopping bags. Something must be done - quick. If you’re feeling sick about your spending, the best cure for that spending hangover is a switch to damage control. Here’s how to put the new year on the right track.
- Step 1: Get over it
A hangover, in the traditional sense, is caused by a combination of the toxic by-products of alcohol metabolism, dehydration and vitamin depletion. The symptoms usually include a dry mouth, nausea, fatigue, dizziness and headache. A spending hangover, on the other hand, is caused by a combination of the toxic by-products of overspending, racking up debt and depleting cash reserves. The symptoms of this type of hangover typically include high credit card bills, a lack of cash, nausea, fatigue, headache and a crushing sense of guilt. Yes, especially guilt.
Unfortunately, none of these emotions elicit the kind of energetic response you’ll need to get your budget under control. So, the first step to kicking your spending hangover is to skip the stage where all you want to do is pull the covers over your head and hope it all goes away. It won’t. Get up, eat a healthy breakfast and start tackling your bills. It only gets better from here.
- Step 2: Pick your poison
Every culture has a preferred ritual for treating the symptoms of a night out. In Germany, it’s a meal of raw pickled herring. In Sicily, the old-school cure is to snack on a dried bull’s penis (what?!). And in Ireland, tradition says you should be buried up to your neck in wet river sand (now there’s one cure that could really help with your spending problem!).
The point is, undoing the damage of any kind of overindulgence isn’t going to be easy to, gulp, swallow. Once you’ve looked at what you spent and what you owe, it’s time to come up with a plan for paying off those debts. You might not have to snack on anything nasty, but giving up your regular indulgences may leave a bad taste in your mouth nonetheless.
- Step 3: Sleep it off
Staying in bed is a sure-fire way to lessen a hangover, but while we would never advocate pulling the covers over your head as a way of dealing with overspending, a little post-holiday downtime is in order. You’ve had your fun – and you have the credit card bill to prove it! But all good parties must come to an end, and it’s healthy to spend some time enjoying the simpler (read: cheaper) pleasures in life - such as cooking meals at home, reading a good book, or cozying up to watch a movie in your living room. There’s always a time to celebrate, but if the holidays happened every weekend, no one would look forward to them. You might have enough credit to buy whatever you want whenever you want, but the more you buy, the less it’ll all mean to you. And what good are the holidays if they aren’t something to get excited about? Learn to dial things back and you’ll give yourself a gift money can’t buy: something to look forward to!
- Step 4: Keep healthy habits going
It’s easy to resolve to live better when you’re in the midst of feeling especially penitent about the damage you’ve done to your pocketbook. The problem is that as soon as your sense of contrition fades, your resolve can go up like a holiday wood-burning fire. So, rather than push those guilty feelings aside, make note of them. Pin your latest credit card statement up on the fridge (yes, everyone can see it!) and get into better habits now, before those guilty feelings fade. You can start by creating a spending budget that’ll allow you to pay down your debts quickly and set some money aside for savings. (Bonus: you’ll be on pace to avoid a spending hangover altogether next year.)
- Step 5: Vow to never do it again
Canadian household debt climbs each year. This year was no exception; in the third quarter, our debt reached yet another record of nearly 165 percent of household income. Because the fourth quarter includes the holiday season, it isn’t likely that Statistics Canada’s next report will be much brighter. But despite the fact that so many of us now owe waayyy more than we earn, it isn’t a hopeless situation. Because while it’s sometimes dramatic and unexpected financial circumstances that conspire to dig us into debt, most of us put ourselves in that position in a much less dramatic way…a few indulgences at a time. The good news is we always have the power to turn the trend around in much the same way.
Let this year be the year that you learn to say “no” just a little more often. It isn’t easy to do, but the payoff is well worth the sacrifice.
Undoing what’s been done
When it comes to curing a hangover, folklore is full of remedies. Some work, many don’t, but they’re all the same in the sense that they promise a way to undo what’s already been done. That’s something that naturally appeals to all of us. If only we could rewind to that time before the holiday season when we promised ourselves that we wouldn’t overspend, not this time. The reality is that everyone makes spending mistakes. They key is to recognize them early and get them under control as quickly as possible, because while overindulging in alcohol will only haunt you for a day or two, a spending hangover can plague you for years.
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Nothing contained herein is intended to provide personalized financial, legal or tax advice. Before implementing any financial strategy, you should obtain information and advice from your financial, legal and/or tax advisers who are fully aware of your individual circumstances.