January – the time of new starts and hope. The problem is, for many, the hangover from Christmas lasts long beyond the trip to the bottle bank.
Instead it is perpetuated as we gradually come to terms with how January scores in the finance stakes. A staggering 1 in 10 people fell in to debt in the UK last Christmas, or got further into the debt that they already had, according to the Money Advice Service.
January shouldn’t be a time for financial blues, so what can you do about it?
Start Before January
It is common sense, but the simplest and sure fire way to fight off the annual January financial blues is to pre-empt them by planning your festive period in advance. With careful planning and budgeting before the blitz of Christmas spending, then it is possible to keep spending within your means and still have a wonderful Christmas.
Additionally, remember that many employers pay their employees early in December. If this is the case for you, don’t think “let’s get spending”, instead take time to ensure you hold back what you need for January. For many people January can feel like an extra-long month – financially – for this reason alone.
Most notably, avoid paying for Christmas on credit cards – the interest won’t be much fun come the New Year. Staying out of debt is our number one piece of advice.
Too Late, Debt is Here
If that advice is like slamming the stable door after the horse has bolted, don’t panic. There are ways to address the January financial blues without despair.
Keep Calm, Don’t Panic, Take Stock
Your starting point needs to be a realistic assessment of the situation rather than a panicked strategy of ignoring the problem. Yes, debt can be immensely worrying, but we assure you that it’ll feel less daunting, and be managed sooner, if you face it head on. This starts by taking stock of the situation: who do you owe money to? How much? And when does it need paying back?
Next, you need to prioritise paying off debts that threaten either your home, or any of the essential services. Following this, you focus on those with the highest interest rates.
What Not to Do
Even if you haven’t run in to a great deal of debt over the festive period, do not borrow more to make January feel better. Once you start borrowing to pay off the debt then you’re likely to be chasing your tail for a very long time to come.
Don’t make any rash purchases in the sales. Nowadays with online shopping, goods at the right price can be found throughout the year.
What You Can Do
It may be possible to move the balance of your credit cards all on to one credit card with a 0% balance transfer. This means that, for a period of time, the debt won’t keep growing.
Also, now is the time to set up a carefully thought-out and realistic budget that allows you to meet your financial obligations. Take time to go through what you can afford to repay and how long it will take you to get debt free.
Rein in all the extravagant spending. This may mean taking a thermal mug of coffee from home instead of buying one at the station, having movie nights in instead of going to the cinema, or going out for a run instead of joining that expensive gym. The thermostat might be able to come down a notch, or 2017 might be the year you decide to cook more from scratch and bin the take-away menus. Soon, these savings can add up and make a good impact on your finances for the better.
If Things Get Too Much
Hopefully the above tips will have you feeling positive about getting on top of your finances for 2017, rather than leave you wallowing in the January financial blues. However, if the debt feels too large to manage, or you’ve tried the above and the blues are still lingering, then it may be time to get further help. The Citizens Advice Bureau and the charity, National Debtline both offer free and confidential advice to those struggling with the January financial blues.