• FLM Wealth Management

Coping with the festive financial hangover

The holidays can be an expensive time of year. From festive feasts to generous gift giving, the cost can quickly ramp up. Many times, we ignore the costs until after the holiday and feel the burden of it in January.

(Want to keep this from happening next year? Read The biggest festive season spending mistakes (and how to avoid them) here.)

Reviewing credit card statements and bank balances can make the already dreary January feel even worse. But it doesn’t have to stay that way! Here are some easy-to-implement tips for getting back on track after going off the rails with holiday spending.

Assess the damage

The first thing that you’ll want to do to get your finances sorted this month is to get an understanding of your situation. Regardless of how much you may not want to, now is the time to crack out those receipts and statements to get a good view of what you’ve spent.

The important things at this stage are to figure out how your spending has affected you. It may be that you have taken on new debt through credit cards, overdrafts or loans. Or perhaps you had to move money out of savings to cover your spending. Either way, you will need to be able to see how big that impact is.

Set your budget

One of the simplest things you can do to recover from December spending is to set yourself a new budget and stick to it. Easier said than done, perhaps, but it is a great starting point. By being clear with yourself about how much is actually available to spend after paying bills, paying off December spending and putting funds toward savings, you’ll be much less likely to continue overindulging.

There are a lot of great templates out there for setting up a budget, as well as books and articles with clear ‘how to’ sections. Alternatively, you can also speak to an adviser and get their help in turning your finances around.

(Learn more: Free Like Me Podcast #6 - How quickly lifestyle costs can creep up)

Take a holiday (a spending holiday)

If simply setting a budget and keeping to it seems like it won’t make enough of an impact, you can always try a spending holiday. There are two ways to think about a spending holiday depending on what works best for you. The first method is to think of it as an extreme budget where you don’t allow for any (or very little) extraneous spending. This method can yield very rapid results, but, much like an extreme diet, can result in overdoing it again once the programme is over. This type of spending freeze might be best suited to those with an excess of willpower.

The second method is a bit more fun. Think of it as a 30 Day Challenge. Over the course of the month, try to spend under a certain amount each day or week. For each week that you succeed, reward yourself! (Ideally with something free like a nice bath or a cosy night in.)

Gamification has been known to be a successful way of kick-starting change and the regular reward system can help prevent you from burning out.

Marie Kondo your home

Another option for getting your finances back in hand isn’t about spending less, but having less. January is a great time to go through the things you own to see if they are still valuable to you and still ‘spark joy.’ As you work your way through your home (category by category if you do decide to use the KonMari method), set aside items that you would be able to sell.

Once you’ve begun gathering, you can put these items up for sale on sites like Facebook Marketplace, eBay or Gumtree. You can also use apps like Depop and Vinted for selling clothing.

This is a particularly enjoyable way to tackle your finances because you can both pay off debt and make more room in your life for things that matter to you.

Try Dry January

This doesn’t have to be strictly about alcohol, but starting a month-long challenge that reduces indulgences can be an effective and rewarding way to change your spending. The average UK household spends £868 per year on alcohol. In London, the costs can be almost twice that.

When you do your initial assessment of your December spending, keep an eye out for any areas that you could cut back on. Maybe it really was beer and wine. Or maybe it was a few too many takeaways. No matter the category, take January as an opportunity to show that you can do without it. Not only will it feel good for your bank account, but it will also start your year off with a sense of achievement.

Getting back on track after holiday spending can be tricky. But if you try the above methods, you may find that it’s more manageable. It’s also completely reasonable to speak to your adviser to set up a plan that best suits your goals, especially when experiencing things like decreased savings or taking on new debts.


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FLM is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group's wealth management products and services, more details of which are set out on the Group's website www.sjp.co.uk/products. The title 'Partner Practice' is the marketing term used to describe St. James's Place representatives. FLM Wealth Management is a trading name of Financial Lifestyle Management Ltd.