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Get your post-holiday budget back on track

Get your post-holiday budget back on track
The holiday season may have left you reeling with a pile of bills and even worse, with unintended debt.

dubai - Here's a to-do list to tackle your pile of bills and unintended debt

By Ambareen Musa

Published: Sat 11 Feb 2017, 4:05 PM

Last updated: Sat 11 Feb 2017, 6:08 PM

The 2016 holiday season and the most wonderful time of the year is now behind us. And even though the festive spirit is no longer in the air and the decorations have come off, there's still an after-effect many of us are struggling with - how to get our finances back in order! But if the festivities have dampened all your budgeting initiatives and drained your savings, it's about time you roll up your sleeves and do something about it.

If the past holiday season has left you reeling with a pile of bills and even worse, with unintended debt, here's a to-do list compiled by our team at Souqalmal.com that will help you fix your financial state of affairs.

Tracking holiday expenses
It is easy to go overboard during the holiday season, and not just with all the delectable holiday feasts, but with spending as well. Money spent on decorations, presents, travel, food and such, can really add up and completely blow your budget. So, the first step towards tackling all the additional expenses is to track where all the money went.

Make sure you hold on to bills and receipts. This is all the more important if you've made cash purchases and without payment records, it will be a daunting task to estimate how much cash you've actually doled out. If you've made payments with your debit or credit card, you'll have to check your bank account or credit card statements to account for all the expenses made over the holidays.

Compare holiday spend with budget
Once you've tracked your holiday expenses, the next (and more important) step is to compare your actual spending with the budgeted one. If you had assigned a specific amount to all the expense categories, analyse where you exceeded your budget and where you managed to save. This will help you plan your budget better the next time around.

Handle credit card bill
This step is a crucial one. As a credit cardholder, you've probably swiped your way through the holiday season. And if not already by now, you'll soon have your credit card statement generated and e-mailed to you by the bank. So, what next? Would you get by with repaying just the minimum five per cent of the outstanding balance? We advise you to think twice before doing that!

Making the minimum payment alone would leave you with very expensive high-interest debt on your credit card, which will start multiplying every month. Before you know it, you will accumulate significant debt, making repayment all the more difficult.

You can explore the balance transfer option if you can't afford to pay off the entire outstanding balance in one go. Look for a credit card with a zero per cent balance transfer facility for say three to six months, and when you transfer your current card balance to the new card, aim to pay off all the outstanding amount in the interest-free period to save on interest payments.

Cut back and compensate
So, the festive season drained your bank account and you're now on a tighter budget. The best and fastest way to get back on track financially is to cut back on your current spending. And cutting your spending is not so difficult if you have the right perspective.

You've probably received a bunch of nice gifts and have enjoyed holiday feasts with friends and family. So, now would be a good time to observe some financial austerity. Focus on managing your basic household expenses and postpone fancy dinners and frivolous shopping for a month or two. Trust us, the savings you accumulate in the process will make it worth all the effort. And once the financial pressure eases, you can go back to following your regular budget.

Plan early for next holiday
The final step in our to-do list aims to help you prepare for the next holiday edition. You should try to get a head start on your financial planning for the 2017 festive season by planning for it in advance. Since you've already compared your actual and forecasted holiday expenses, use this analysis to help you fine-tune your holiday budgeting strategy for this year. Think of innovative ways such as off-season shopping and DIY decorations to cut back on holiday expenses.

The writer is the founder and CEO of souqalmal.com. Views expressed are her own and do not reflect the newspaper's policy.

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