Expert offers advice to those who overspent during the holidays

FARMINGTON HILLS — For many people, the holiday season and birthdays are a mixed bag.

While a lot of enjoyment can come from giving and getting gifts, the giving part can come with a big price tag.

For those who may be feeling the pinch after helping to spread some joy to others, there is help available to potentially ease the pain.

GreenPath Financial Wellness, based in Farmington Hills, is a nonprofit organization that offers free one-on-one financial counseling.

With December being a big month for holiday spending, the nonprofit is accustomed to having people reach out for assistance in the new year.

“Our phones start ringing off the hook in January every year, and this year has been no different,” said Amber Miller, who is a partner experience manager at GreenPath. “We do know call volume has been even higher this January than it was last January.”

According to Miller, after spending large amounts of money, a question that residents may ask is, “What do I do now?”

Her advice doesn’t begin with sharing financial strategies.

“First of all, know you’re not alone. Take a deep breath; what’s done is done — we can’t go back to Dec. 1 now,” Miller said. “It’s about coming up with a plan moving forward, spending some time getting a clear picture of where you’re at.”

Miller suggests that people check their statements and list the balances that they owe.

“This is not always fun, but it is really important to get a clear picture of where things are at so you can figure out what the next step looks like,” she said. “Take a look at your budget bin. Do you have some extra cash flow that could go towards maybe getting the debts paid off quicker? Are there opportunities to maybe bring in a little bit of extra cash temporarily, or some things laying around the house that might be able to be sold to put that extra cash towards these balances? And then come up with a strategy.”

One of those strategies can be to reach out to people who make it their business to come up with debt-management solutions.

“If you’re looking at your budget and you’re like, ‘I don’t have much wiggle room,’ maybe get creative, and that’s where reaching out to an organization like GreenPath can help,” Miller said. “We specialize in looking at your situation with you and helping you understand a variety of different options that may make sense. As a nonprofit agency, we offer what’s called a debt management plan that not a lot of people know about, and it can be a good option for getting high-interest credit cards paid down by working directly with creditors to get lower interest rates and better terms, get those balances paid in full, but to do that more manageably without having those high-interest rates making it difficult to get progress on getting those balances paid off.”

Knowing that holidays and birthdays are coming in advance gives people ample opportunity to help prepare to budget for them, Miller said. She is not aware of any sound financial goals that don’t come back to having a budget plan, and birthdays and holidays are one example of how such a plan can be carried out.

“The next holiday season is 10, 11 months away now from starting, so if you can get your budget to a spot where you can start tucking money back now, on a little bit of a smaller basis — if you can tuck $100 away now for the next 10 months — instead of having to come up with $1,000 in December, that’s a way that can really set you up for success,” Miller said. “Of course that’s easier said than done if you’re trying to get last holiday season’s debt paid off, but that’s something. If you get a tax refund coming up, maybe this is an opportunity to either get that debt paid off a little quicker or start building that savings to prepare for next year. … I know there’s a lot of temptations to spend, and a lot of unexpected things during the holiday season, but try to enter that season with a clear plan — ‘Here’s my budget. Here’s what I want to spend.’”

After determining what a holiday budget looks like, one suggestion Miller offered is to withdraw cash and put it into an envelope, with a specific amount of cash designated per person.

“When I’m buying gifts, that cash comes out, and when the cash is gone, I know I’m done there,” she said. “That’s something that can be helpful.”

Miller said that according to data compiled by the National Retail Federation, holiday sales in 2023 increased by 3.8% to $964.4 billion.

While she understands that doesn’t necessarily speak to overspending, she did share a tip for how people can avoid spending more than they might want to in the first place.

“(Have) that mental dialogue with yourself of like, ‘If I  make this decision now, what is this going to look like for me next month, next year? Is this decision, spending on this, worth the extra stress, the extra money I’m going to be paying to get this paid off?’ Just kind of have that cause-and-effect conversation, almost, with yourself of thinking not just in the immediate present situation, but thinking about what the long-term effects of this might be and using that to kind of frame that decision-making a little bit more with that bigger picture,” Miller said.

Miller shared some words of encouragement for those whose bank account took a hit after the holiday season.

“I think the biggest point here is … letting them know that they don’t have to navigate these options alone,” she said. “There are people, organizations, resources out there that can help come up with a plan, not only to get things taken care of that have already been done, but set up on a solid path so that maybe this isn’t a concern after next holiday season.”

For more information about GreenPath Financial Wellness, call (800) 550-1961 or visit greenpath.com.