Post-Holiday Budgeting to Keep Your Homebuying Goals on Track

• Pay Off Debt, Increase Savings •

The holidays may be behind us, but the way we manage our finances after the festivities can have a big impact — especially if you’re planning to resume your homebuying journey this year and buy a new house in San Diego during 2025.

As decorations come down and daily life returns to normal, now is the perfect time to refocus on your long-term financial goals for 2025. Here are some post-holiday budgeting tips to help you stay on track for buying a new house in San Diego this year.

Tackle Credit Card Balances Strategically

The holiday season often brings extra expenses, and many aspiring Buyers carry higher credit card balances than usual. If this sounds familiar, don’t stress — but do take action.

Work on paying down your balances to below 30% of your credit limit as quickly as possible. This boosts your credit score and also improves your debt-to-income ratio, which Lenders carefully consider when approving you for home loans or issuing pre-approval limits.

Rebuild Your Savings with Intention

Your savings might have taken a hit with all the gifts, travel, and celebrations during the holiday season. January is a great time to revisit your budget and rebuild your reserves.

Whether it’s saving for your down payment, extra cash for closing costs, or stashing an emergency reserve fund, set a specific savings goal and automate your contributions to stay consistent. Consider temporarily cutting back on non-essentials like dining out or unused subscriptions to give your savings a boost.

Avoid Opening New Lines of Credit

It might be tempting to take advantage of January sales or financing offers, but opening new credit accounts can affect your credit score and increase your debt load.

Applying for store credit cards or financing large purchases could lower your credit score and raise red flags for Lenders. Loan officers prefer to see a stable credit history, so hold off on any new credit applications until after you’ve closed on your home.

Organize & Document Gift Funds

If family or friends gave you financial gifts over the holidays that you plan to use as help with your home purchase, make sure everything is documented properly.

Most Lenders require a gift letter to accompany your proof of funds. Getting these details organized now will make the mortgage process smoother down the road once you open escrow and work to finalize closing your new home purchase.

The Bottom Line: Refocus on Your Goals

It’s easy to lose sight of long-term goals after the holiday whirlwind of gathering and gifting. Now that the season is winding down, this is the perfect time to reset and refocus. Take a moment to revisit your homebuying plans. Focus on why you’re saving up to buy a new house and what motivates you to upgrade your current home. Keeping your dream in mind can help you stay motivated and disciplined.

Got questions or need a gameplan? Reach out to us at 858.880.0195 or email portia.green@compass.com for guidance on how your post-holiday finances could affect your homebuying plans in 2025. We’re here to help you make smart moves and make sure nothing stands in the way of achieving your real estate goals this year.

Sources: 

https://www.bankrate.com/banking/savings/tips-to-pay-off-debt-and-increase-savings/

https://www.cnbc.com/2024/12/26/36percent-of-american-consumers-took-on-holiday-debt-averaging-1181.html

https://www.aol.com/36-americans-took-holiday-debt-204733002.html

https://financebuzz.com/simple-ways-pay-off-holiday-debt

https://selling-guide.fanniemae.com/sel/b3-4.3-04/personal-gifts

https://www.forbes.com/sites/sophielizacannon/2025/01/03/is-2025-a-no-buy-year-how-to-cut-out-consumption-in-the-new-year/