How to get your finances back on track after Christmas
Christmas is often a time of indulgence and, while that’s natural, many people do take things a little too far when trying to make the festive period perfect for their friends and family. Whether you’re the type of person who buys gifts for everyone and their dog or who stocks the cupboards up with enough food to feed the whole street – spending can easily spiral out of control.
If this sounds like you, here’s an easy to follow, nine-step plan to get things back on track:
1. Cut up that credit card
On average, Brits spend £342 on credit cards at Christmas and that’s on top of any other spending that is required for the month too. If you can’t pay this off once the New Year rolls around, this can become a big issue.
This means you need to put a plan in place to repay this debt. Cutting up your credit card means you won’t be tempted to spend on it anymore and you can focus on repaying the debt you have built up. If you need any help or advice on how to go about this, contact our team of experts who are here to answer your questions.
2. Move your debt to a 0% interest credit card
If you don’t want to cut up your card but you’re running out of time on an interest free introductory period, you could look to move what you owe onto another credit card. This may give you more time to repay the debt without worrying about extra costs. We have a helpful blog on how to tackle credit card debt here that may help.
3. Set realistic goals
Perhaps you want to clear your debts in the next 12 months or put a certain amount of money away for next Christmas? Now is the perfect time to set these goals. Be realistic about time frames though and ensure you seek help when necessary to ensure you can reach them.
When you achieve them, be sure to treat yourself to something small as a reward – perhaps a meal out or a trip to the cinema.
4. Sell or return any unwanted presents
This might sound a little cruel, but any Christmas gifts you know aren’t going to get used (or perhaps have received duplicates of) can be returned or sold online to generate some extra cash. This can then be put towards your necessary monthly expenses or if you’ve spent on your credit card, moved around to pay some more of this off.
Alternatively – while making room for all of your new gifts – you could sell anything you (or the kids) don’t need anymore. An old games console can still fetch a decent amount of money and last year’s popular Christmas toy could well be sold on for some spare cash to help you get your finances back on track.
5. Put a strict budget in place
Once the festivities are over, think carefully about where your money is going each month. Take a close look at your finances and monitor what your income must be spent on and what any leftover cash should be used for.
We have an in-depth guide on how to avoid debt here on the site that features lots of helpful tips on creating a budget and ensuring you have a savings buffer ready for those emergency situations. Click here to read this and take some tips away.
6. Find cheaper alternatives
New Year is the perfect time to review your expenditure – whether it’s your energy bills, weekly shop or just general outgoings you make every month. If you want to find cheaper alternatives, it’s time to load up some comparison websites and find a better deal on how much you pay for your gas or water bills.
You could also consider perhaps swapping your weekly shop at your usual supermarket for a ‘cheaper’ store to compare prices and cutting down costly habits, such as regular visits to coffee shops.
Keep note of how much you’re saving and check your outgoings compared to a normal month’s expenses, to see how much you’ve saved. You might be surprised by the amount and feel encouraged to keep going to help your bank account recover – after the Christmas excess it’s just endured.
7. Cut back on the little luxuries
After all of the indulgence at Christmas, it might be a good idea for your bank account (and your health) to make some small changes in your everyday lifestyle. Here are some things you could down on – or out completely:
- Reduce the number of cigarettes you smoke a day – This easily saves money as you need to buy a new pack, less often.
- Cut down how many takeaways you order – Buying in food to recreate takeaway dishes at home is cheaper and healthier, plus you might even learn some new recipes to enjoy forever more.
- Make lunch at home – Ready-made lunches can quickly add up, but simply buying bread and sandwich filling and making this at home can save cash that can help to cover your post-Christmas costs.
- Skip the bar – Going out to socialise every weekend is great fun but not so good for the bank balance. Invite friends to your home to catch up and perhaps share a much cheaper bottle of wine to save some cash each month.
Challenging yourself to make these changes is a great resolution and method for cutting back your spending.
8. Start planning for next Christmas now
It’s never too early to think about next Christmas, especially when it comes to your finances. Planning as early as possible means you can set some cash aside to cover the spending. Here are a few things to put in place now:
- Move a small amount of money into a savings account each month – Just £10 a month can quickly add up and stops you from using a credit card next Christmas on some of your purchases.
- Sign up for a Christmas voucher scheme for your food shop – Many supermarkets now offer Christmas savings options, where all the points you accumulate over the year are converted into money off coupons for December. It’s a great way of knowing you have the money you need for a food shop or last-minute present purchase.
- Look for deals – Boxing Day deals and January sales can offer a great opportunity to pick up gifts early for a much cheaper price to save you cash in the long run. We recommend you only do this if you have the funds available though.
Set budgets with friends and family
Many of us spend so much money because we feel like we have to – often due to pressure to keep up with friends and family. Sit down with those you buy presents for and ask to set a strict budget for how much you spend on each other to avoid going over the top next Christmas.
Perhaps a ‘one present rule’ with a £10 limit for anyone outside of your household would be a good starting point? You and your partner could also agree not to buy each other gifts to free up some cash for the kids’ presents or to keep as a savings buffer over the Christmas period.
9. Take some time to focus on your own wellbeing
While it’s important to get a handle on our finances, we also need to take a step back after the festive period and ensure we are taking care of ourselves too. Christmas can make any financial difficulties you may be having feel all the more worse, potentially leading to depression and anxiety.
Remember to take some time out for yourself or speak to someone you trust about any worries you may have. Charities such as Mind or the Samaritans are always on hand as well, to discuss any mental health concerns if you don’t want to confide in friends or family.
If you do need to speak to anyone about your debts, don’t hesitate to get in touch with a member of our expert team here at PayPlan – simply call on 0800 280 2816.
Looking for more information on how to cut back over the festive period and prepare financially for 2018? Take a look at these other helpful posts here on the site: