Feeling financially scorched? How to recover from the Christmas holiday period

If your bank account looks a little sunburnt right now, you’re not alone. Frances Cook has four tips for getting back on track.

Christmas costs, holidays, the new year kicking off with school uniform and stationery expenses – look, it’s a classic time of year to feel over-extended, and a bit annoyed about it.

The good news is that you probably don’t need a dramatic reset, or to eat two-minute noodles from now until winter.

From feeling less stressed, to the places where you could find some extra cash in your budget, here’s what New Zealand experts recommend for getting on top of your money at a stressful time.

When money gets stressful, the instinctive response is often avoidance.

Jason Leong, the CEO of budgeting software company Pocketsmith, points out that not looking often just makes the stress worse

“It’s like trying to cross the road blindfolded. Can you imagine how just horrifying that would be? You just hope that you don't get hit by a car, or that someone's going to slow down for you. I think a lot of people go through their financial lives like that.

“When you take the blindfold off, you still have to cross the road, but you can at least anticipate how quickly you're going to step forward, when you're going to pause to get across the lanes. That's what financial control feels like to me.”

Leong says once you know where your money is going, it’s often less stressful overall, even if you still don’t like the answer.

That’s your reset step one: pull up your accounts, scan the last month, and see what’s actually happening.

Once you’ve looked, be careful not to fall into an easy trap, where all-or-nothing thinking kicks in.

If you don't like the state of your outgoings, you might announce you're going to stop foolish spending and effectively be “perfect” from here on. But when that money crash-diet fails, you’re likely to then give up.

Performance psychologist Dom Vettise sees this pattern a lot, not just with the elite athletes he helps, but with everyday goals, including money.

He says two common mindset traps to avoid are “mental filtering” and “disqualifying the positive”.

Mental filtering is when you only think about the things that have gone wrong in the day, leaving you feeling like a failure.

That’s often accompanied by disqualifying the positive, which is when anything good that you achieved is dismissed as being down to luck.

Down that road lies only misery, where motivation drops, and you feel like you’re failing even if you’re making slower, steady progress. Instead he recommends looking for the things you can control, and looking for even the smallest moments of progress, and celebrating them. That way you give yourself motivation to keep taking the steps forward.

Jane Joo, a financial influencer, has managed to invest over $100,000 into the sharemarket, at only 25.

One of her tactics for being able to invest so much is to keep her living costs low, and budget carefully.

But she’s not a fan of obsessing over coffees and small treats.

“So often I hear people say, cut back on the coffee, cut back on the matcha lattes,” she says. “And I just don’t think it’s those things that are breaking the bank. I focus on the bigger picture items, by doing a personal finance audit.”

That means checking power bills, phone plans, internet, and subscriptions. They’re the costs that tend to run on autopilot, but can add up to big money

Once they’re sorted, you’re able to save money without exerting daily willpower.

“If you go and look on a power plan, that could take like 10 to 15 minutes and it could save you hundreds of dollars," says Joo.

“That’s a brilliant hourly rate.”

One reason post-summer money resets fail is we’re sometimes trying to force change at the hardest time.

You don’t really want to be back at work, the credit card bill is stressful, and you’ve probably got a couple of New Year resolutions on the go.

In order to stay motivated, you need to make it as easy as you can, and build on the wins you get.

EnableMe strategic coach Shelley Palman says that means that, instead of relying on discipline, she focuses on timing and systems with her clients.

Any moments when money pressure naturally eases is a moment to lock in that progress.

“When the wins come, we call them tailwinds.”

At this time of year, you could have more tailwinds than you realise. There are fewer social events, routines are returning and summer costs – trips away, family staying, the need to entertain bored kids – are lifting. The mistake people make is letting those gains disappear into other forms of thoughtless spending.

“Don’t waste it,” Palman says.

Look for any costs that have gone down, or disappeared entirely post-summer. Could you take some of that money and redirect it, such as with an autopayment into savings?

Locking in the habit before you get used to higher spending means you don’t feel deprived, and you get the boost of feeling more financially prepared.