So you blew the budget, now what?

Christmas is over, just like that, and some of us spent more than we should have. And maybe we (gasp) put it on a credit card. Can't pay it all off in one month? Now, what should you do?

Most importantly don't give up and throw out your budget plan. Just as with diets, it may be tempting to say, budgets don't work for me, see I proved it. There's just not enough to go around.

Instead of giving up on gaining control of your money, take a step back now and develop a plan to deal with the holiday debt.

To be honest, my credit card bill in January is going to be bigger than expected. I have a credit card that I use for gasoline and other purchases, which I pay off in full every month. (I use this card because I earn books with it). But I am anticipating this bill is going to be too big. For one thing I had two major car repairs, one the head gaskets had to be replaced, and the second was for a car accident and we had to pay the $500 deductible. So we had a total of $1150 in car repairs! And yes, I may have exceeded my Christmas budget a wee bit..., well, ok, quite a bit. I did resist that ipod and game system I mentioned in a previous post, but...there were other things. Have I failed? No, and neither have you. We have a problem to solve, a challenge to face. If you, like me, have been improving your money management over the years, you will also be able to work out a solution and get back on track in no time. And if you are just starting out, this experience will be a great teacher.

So, what to do. The first thing is to stop using the credit card until the balance is paid in full. Take it out of your wallet or purse, freeze it in a block of ice if necessary, but stop using it. Then, develop a plan for paying off your debt. See if you can pay it off in 3 months or less. If you paid it in three months calculate what those payments would be. Look over your spending plan and see how you can come up with those payments. Cancel netflix for 3 months, limit eating out and other entertainment, don't buy any new clothes, etc. Look for expenses that you can cut, just for the next three months.

Can you earn some extra money? Do you have any items you can sell? Can you donate plasma for these three months? (That will earn you about $200/month) Can you take on any side jobs, do some babysitting?

Take on the challenge and be creative. And if you need help finding solutions, come in and see one of our financial counselors. We can help you develop a spending plan that fits your life, and also help you start what we call a "Put N Take" savings. This is like your own personal Christmas club account, but it includes money for all those unexpected expected expenses, such as car repairs, eye glasses, and gifts.

We welcome your comments. How are you handling any post-Christmas debt? How did you do this year? Have you improved, if so how?