Jane Clack, Financial Advice Consultant at PayPlan, shares some of her best tips and tricks to help you avoid the dreaded New Year’s hangover.
It’s safe to say that 2020 hasn’t been easy for any of us, but there is light at the end of the tunnel. The rollout of Covid-19 vaccinations has already started across the country, which means (hopefully) we’re just a few months away from getting things back on track.
In the meantime, it’s more important than ever to take care of your finances as we head into 2021. The last thing you want is a debt-induced hangover that lasts into next January, so here is some of my top tips on how to start 2021 with a clear head and a healthy bank balance.
Start budgeting
If you’ve never used a budget before, why not make it your New Year’s resolution? Back in my days as a financial advice consultant, the one thing clients have told me has helped them the most over the years is to create a monthly budget and stick to it.
Having an idea of where your money is going each month makes it much easier to start saving and can help you understand where you may be spending too much. The Money Advice service offers a free online budget planner that you can use to get started.
Use a benefits calculator
You always have to make the most of all the perks the state offers you, and in the age of Covid-19, it’s no different. Benefits can make a real difference in terms of disposable income each month, and you might be surprised at how much you might get. It’s easy to see how much you’re entitled to online – just use a free benefit calculator.
Beware of buying now pay later
They may seem appealing at first, but buy now and late pay programs can become a problem if you allow payments to pile up. From 2018 to 2019, PayPlan saw a 49% increase in the number of customers engaging in a debt plan with problems buying now, paying later, and 73% of those surveyed as part of our research. said buying now paying later contributed to debt problems later. , so be careful when using them.
Set goals for 2021
Many people find that having a goal to hit (save X by June 1, 2021, for example) makes it easier to put money aside. Having a target means you’re probably more likely to stick with saving and also gives you a bit more freedom; if you spend too much or less in one month, you can compensate by setting aside a little more or less the following month. You may find it easier to do this rather than feeling pressured to save the exact same amount each month.
Think about it – if you set aside just £ 1 a day you would have £ 365 at the end of the year. What could you put that to? If you can save £ 2 a day, that’s £ 730. Small savings add up over time and can make a big difference!
Don’t worry about not spending enough
A lot of people think they have to spend a lot of money to make things special for their kids, family or friends. This applies to Christmas, birthdays and other celebrations. That’s understandable, especially considering everything that has happened in 2020, but you shouldn’t feel pressured to spend what you can’t afford, as it will only lead to more hassle. money on the road. Spend what you can on gifts and festivities, and if you can’t afford to buy as many family members as you usually can, then don’t worry, no one will blame you for living within your means. .
Compare the prices
If you haven’t yet purchased a planned gift for your family or friends, make sure you get the best deal on anything you buy. Amazon isn’t the only online retailer, and you might be surprised at the lower prices you can get in small online stores as well as the great deals you can get in-store. Make sure you take a good look around before you buy.
My shopping tip also applies to your weekly shopping, broadband, phone, and utility bills. Make sure to use comparison websites to make sure you’re getting the best deal and if you feel like you’re overspending now don’t wait to change it! Take action now and start saving more for the important things in life.
Don’t buy everything on credit
Credit cards can be useful to tide you over while you wait to get paid, but don’t overdo it. Not paying them on time can mean you are responsible for expensive late fees, and these can be especially expensive if you used them to pay for big ticket items.
For added security, always leave some cash aside to make sure that no matter what, you’ll be able to pay off your card in full when it is due – there is nothing worse than overdue credit card bill!
Do your own credit checks
If you must spend with a credit card, carefully review the terms and conditions of the card before using it. Lower interest rates are not always necessarily better; Sometimes cards with higher interest rates have interest-free periods, so if you are confident that you can pay off the card on time, you could save a considerable amount on interest charges. Always read the fine print!
Watch out for payday loans
A payday loan is another program that may sound appealing, but it can be quite expensive if you cannot stick to its terms. Some payday lenders have very high interest rates and incredibly expensive late payment fees, so try to avoid using them if possible. If you have to use one, you need to be absolutely certain that you can repay what you have borrowed in full and on time.
Seek help from a trusted and reputable debt counselor
You could be someone who for reasons beyond your control got into debt despite careful management of your money. It does happen, and there is nothing to be ashamed of or embarrassed about, especially in today’s climate.
If this sounds like you, it’s important to remember that there is always help out there. Whether you choose to get free debt advice from the company I work for, PayPlan or someone else
