Financial Health Check - How to Handle a Financial Hangover
Posted by: Eden Morrison on January 10 2018 | Tagged: General news
As the festivities draw to an end and the dark days continue, January can be a difficult time for many. Added to this, nearly 8 million people in the UK have entered into the New Year with a 'financial hangover' as a result of overspending, or taking out more credit than they can manage to cover the ever increasing cost of Christmas.
If you find yourself in a situation where you have more month than money this January, don’t worry, there are a number of things that you can do to cut costs and get your spending back on track.
1. Set your budget
You may have set a budget for Christmas to help you stick to your spending – it’s time to carry this habit through to the New Year! By writing down your incoming and necessary outgoings, you can see where and when your money will be coming into and leaving your bank. This will also allow you to see where you can cut back on non-essential spending such as takeaway food and coffees, and subscription services such as Netflix.
2. Manage any credit or subscription services you took out for Christmas
To cover the cost of Christmas or to spread the costs, you might have taken out some credit, or may have made the decision to take out items on credit. This is the time to take care to ensure that there will be enough money in your account to cover the cost of the direct debits for these when they are set to come off your account. If you cancel a direct debit, or the payment fails to go through, it is likely that a number of organisations will place a fee on this. When money is tight, adding more credit is the last thing that you want to be doing!
3. Meal Planning
The amount of money that the average family in the UK spends on food weekly is £56.80, and with an average of £700 worth of food being thrown away per family per year, it is likely that there is room to cut a few non-essential items from your food shop. By creating a meal plan and sticking to it you are more likely to use all the food you buy, and are less likely to be purchasing items on impulse which can lead to higher bills at the checkout. This can also help you stick to eating healthier if that is one of your New Year's resolutions!
4. Vouchers and Coupons
Using sites such as Money Saving Expert for coupons and vouchers is a great way to shave some pennies off your shopping bill. This is only helpful if you use coupons for items that you were going to purchase regardless. If you buy items just because you are able to get a discount it is likely that they are not necessary, and therefore you are spending money you could have kept in your pocket.
5. Avoid the Post-Christmas Sales
As soon as Christmas is over, the sales begin. Starting on Boxing Day and usually trailing on until the middle of February, the discounts and price cuts can be very tempting. Only shop the sales if you have the money to do so. Don’t be caught out by low prices and similarly to number 4: only buy if it is something you need, or would have been buying regardless, otherwise it is wasted money.
6. Open a Savings Account
This one might sound silly, especially when money is stretched thin. Having a savings account and putting away some income regularly can help you in times where you need extra money. If you manage to put away £5 each week, in a year’s time you could have £260 which would help towards the cost of next Christmas or even January 2019 when a safety net of saved money could come in handy. If you would like to open a savings account, Scotcash can help to find the best one for you. Click here for more details or contact us.