With the holiday season comes a real temptation to overspend – people often get too caught up in the spirit of Christmas and expend more than they can handle. Unfortunately, the January blues arrives with unwelcome reminders of debt: credit cards are maxed out and bank accounts look bleak. When we overextend our spending habits during December, our financial obligations remain come New Year’s Day, leaving us struggling at the start of the new year.
If you went overboard with your holiday purchasing, the financial aftermath may be even more excruciating than a physical hangover. To recover from this monetary mishap, it will take some time and proper planning on your part as we begin this new year.
Beat the January spending blues – How to get your financial health back on the right path?
Don’t let the January blues get you down. Now that we are passed the dreaded “blue Monday”, it’s time to make some changes to your daily routine and follow our tips to help you stress less about finances.
You have heard of Dry January in respect of no drinking alcohol, why not apply the same in terms of not buying items that are not necessary. Spending time this January making some small changes can help you look to the future with a breath of fresh air.
Sell unused gifts and no longer used items to make some extra cash
Rather than letting your unwanted gifts take up space in your home, why not make use of them? Popular sites like Ebay, Gumtree, Shpock and Facebook Marketplace give users the opportunity to buy and sell items – so if you have any presents that you don’t need or want or older items you no longer use, consider selling them! This way, you can put the money towards paying off debt. Start listing some of those pre-loved possessions which aren’t being used anymore. You might be surprised at how much they generate for you!
Create a sustainable realistic budget
Not having a budget is probably what contributed to your overspending during the festive season. Keeping track of how much you earn vs how much you spend is important to protect your financial health and knowing that you have enough money to live off.
If you’re struggling to create a suitable budget template, the Money Saving Expert website has a free budget planner you can download here. Alternatively, there are several budgeting apps available to download on you smartphone such as Money Hub, Emma & Money Dashboard.
Go “old-school and use cash instead of card this January
Credit and debit cards make buying a breeze, especially with their contactless options for online payments. However, this “invisible” digital spending can often allow us to lose track of how much we are really spending.
On the other hand, using cash can actually be beneficial too: it helps you keep track of your spending more easily, and also encourages healthy financial habits. When you a small fixed amount out shopping with you – leaving all those tempting plastic cards at home – then your spending will automatically become much more disciplined!
The physical tangible nature of your spending will allow you to keep a more visual track record of how much you are spending.
Switch to a new bank account and MAKE money!
With banking, it can sometimes pay to switch to a new account… Literally!! It is worth checking out which UK banks are currently offering incentives for switching your main banking to them. For example, Santander are currently offering £200 for switching your banking to them by opening selected accounts. Please note though that is important that you check out the terms of achieving the bonus to ensure they are compatible with your needs.
For further financial bonus in your day to day banking, look out for savings accounts with a higher interest rate to what you currently receive. with the recent increases in the Bank of England base rate, many banks are now offering much more lucrative rates of interest.
Balance Transfer your credit card
If you are guilty of overspending on your credit card in the lead up to Christmas yet are on the fortunate position of having a healthy credit file, you may be able to take advantage by opening a new credit card with an introductory balance transfer offer over a period of time that suits your needs. This can save you a significant amount of money on interest payments and enable you to reduce the outstanding balance much quicker.
However, don’t fall into the trap of re-spending on the old card as this would negate the benefits of the balance transfer.
Are your debts unmanageable?
If you are already feeling the pinch with money worries and debts with missed payments or defaults. Or, if you are constantly having to use credit each month to maintain monthly spending, please contact us at Become Debt Free today for some financial professional help.
Speak to one of our friendly and professional advisors and tell us about your circumstances. We can then discuss what debt solutions are available to your needs and what the pros and cons of each one is. There are many debt solutions available whether that by an informal Debt Management Plan or a more formal Individual Voluntary Arrangement (IVA) through to Bankruptcy or an Debt Relief Order (DRO).
Call us today on 0113 237 9503 or complete the web form and we will call you back.