By: Brian Ford, Financial Advisor, Northwestern Mutual
The holiday season, with its festive spirit and allure of giving, often leads to unplanned expenditures. While the joy of giving is unmatched, it can leave many facing the New Year with financial anxiety. If you find yourself in this situation, remember that recovery is possible, and planning can prevent future overspending. Here’s how you can get back on track and set yourself up for a more financially sound holiday season next year.
Take Stock of Your Holiday Spending
For many people in metro Atlanta, holiday spending often extends beyond gifts. Travel to see loved ones, hosting gatherings and covering food and entertainment costs can add up quickly. With Hartsfield-Jackson Atlanta International Airport consistently ranking as the busiest airport in the world, airfare prices during peak travel periods tend to rise, adding pressure to holiday budgets.
Even as inflation has cooled compared to recent years, many Atlanta households are still feeling the strain. According to Salary.com, the cost of living in the Atlanta metro area remains 8% higher than the national average, driven largely by housing, food and transportation costs, leaving less flexibility when seasonal expenses arise.
Before you can recover, it’s important to understand the extent of your holiday overspending. Gather receipts, bank statements and credit card bills to see exactly where your money went. Calculate the total amount overspent beyond your budget. This step is crucial, as it provides a clear picture of your financial standing and helps you plan your recovery.
Create a Realistic Recovery Plan
Once you know where you stand, the next step is building a plan that fits your lifestyle and priorities.
Start by revisiting your budget and making short-term adjustments. Cutting back on non-essential expenses such as dining out or subscription services can free up cash to address holiday-related costs.
If your holiday spending led to credit card or buy-now-pay-later balances, prioritize paying them down quickly. High-interest debt can linger long after the decorations come down. This is especially critical in Georgia, where credit card delinquency rates are among the nation’s highest, according to an analysis from financial research site Upgraded Points analysis–highlighting how quickly balances can spiral without a repayment plan in place.
Consider using the debt avalanche method, paying off the highest-interest debt first, or the debt snowball method, starting with the smallest balance. Either approach can work as long as you stay consistent. If possible, temporary income boosts, such as freelancing, part-time work or selling unused items online can help speed up recovery.
Reflect and Learn
Holiday overspending is often emotional rather than intentional. Limited-time sales, pressure to give generously and the growing popularity of experience-based gifts like travel or events can quickly push spending past planned limits.
Easy access to credit also plays a role. Buy-now-pay-later services and credit cards can make purchases feel manageable in the moment, but the long-term cost may be much higher.
Reflecting on what influenced your decisions this season can help you make more intentional choices going forward. For example, if holiday sales are your weakness, consider unsubscribing from promotional emails or setting strict limits on sale purchases.
Plan for Next Year
The most effective way to reduce holiday spending is to start planning early.
Setting aside money in a dedicated holiday savings fund throughout the year can significantly reduce the need to rely on credit. Even modest monthly contributions can make a meaningful difference by the time the season arrives.
It also helps to set clear spending limits for gifts, travel and entertainment ahead of time. Many families are finding that thoughtful, lower-cost alternatives such as shared experiences, homemade gifts or family gift exchanges can be just as meaningful as expensive purchases.
Develop Better Spending Habits
Long-term financial stability is built on everyday habits. Tracking expenses regularly through a budgeting app and practicing mindful spending can help prevent future overspending. Before making a purchase, ask yourself whether it fits your budget and whether you can realistically pay it off quickly.
If there’s one thing to remember, it’s this: enjoying the holidays doesn’t have to come at the expense of your financial peace. With intention and planning, you can recover from holiday overspending and build a sustainable financial future that allows you to enjoy the holidays without stress.
