You might have found yourself in a situation where you overspent, whether it was due to celebrating a friend’s wedding or indulging in a cottage rental that strained your finances. If so, you are not alone. A recent survey by CIBC revealed that over half of Canadians tend to spend more money during the summer, be it on travel, dining out, or entertainment. With the cost of living on the rise, 74 percent of Canadians are struggling to save money.

Financial splurges can lead to stress and anxiety when the bills start piling up. To help you recover and avoid future overspending, we sought advice from two experts on managing a financial hangover effectively.

Recognize and Address Your Emotions

After exceeding your budget, it’s common to feel shame and worry. However, it is more beneficial to show self-compassion, understand your financial choices, and use them as learning experiences. Financial wellness advocate and certified financial planner Shaun Maslyk advises against being too hard on yourself, as it can worsen the situation. Identifying the emotions behind your spending habits is crucial, as spending can sometimes be a coping mechanism for underlying feelings such as fear, greed, or stress.

Journalist Bourree Lam suggests an exercise called “How to YOLO responsibly” from her book, encouraging individuals to track impulse purchases and reflect on their long-term impact to gain insights into their spending habits.

Recover Financially

Understanding why you overspent is the first step towards creating a plan to pay off your debt. Maslyk recommends reviewing your expenses to identify areas where you can cut back, without overly restricting your budget. Lam advises prioritizing paying off high-interest debt first and adjusting savings goals as needed.

Establish Financial Goals

Setting clear financial goals is essential in preventing future financial missteps. Maslyk emphasizes aligning your spending with your values by defining your financial objectives. Lam suggests having a central goal to focus on during spending triggers, whether it’s debt repayment, retirement savings, or other financial targets.

Avoid Triggers and Practice Mindful Spending

Identifying and minimizing triggers that lead to impulsive spending is key to reducing financial regrets. Lam recommends strategies like avoiding tempting situations, such as blocking shopping websites or taking a pause before making significant purchases. By aligning spending with personal values, individuals can resist unnecessary purchases and make more mindful financial decisions.