January is traditionally a month in which most of us are looking to cut-back and clear the debt we’ve accrued over the festive period. It’s a great time to think about where we went wrong in regard to finance the year before and how to put those faults right this year.
The first thing we should all do is sit down and work out exactly how much we can afford to spend each week or month – and try our hardest to not only avoid overspending but to also try and put a few pounds away for one of those weeks when the washing machine breaks or the kids somehow lose their new trainers at school. Work out your incomings and your outgoings and then work out how much you can afford to spend on food and going out – and stick to it.
Check Your Interest rates
First, try and move debt from high interest store cards and credit cards to ones with a lower APR, or you might even want to consider taking a loan out and paying all your cards off as it will be cheaper in the long run. Second, regardless of how much or little you’ve got saved – make sure it’s working as hard as it can for you. If you’ve got money in a savings account or ISA that’s paying hardly any interest, try and move it to one that’s paying more. Additionally, you might want to think about all your accounts to a bank that’s offering you money to do so such as First Direct or Santander. Making a little bit of extra money here and there will also help you pay-off your debts.
Cut back on nights out
You could cut back on the amount of money you spend by staying at home more. You can still have fun with your friends. You can all have a few drinks, get some board games, or play on the Wii. Or you could try some online games. These are not only a fun way of spending time, perhaps as an alternative to an expensive night out, but you can actually even make money playing some of them. A perfect example of an online game that you can have fun and not spend any money is online bingo,as many of the bingo sites offer you free money and bingo tickets to play with just for becoming a member. You can learn how to buy bingo tickets at Butlers. This money can then be used to enjoy playing some fun bingo games and, though the money is free, you still get to play for a range of jackpots and cash prizes, too.
Cut back your vices
Life would get pretty boring if we cut out our vices altogether, but that doesn’t mean we can’t cut back on things such as smoking, drinking and eating out. Cutting back by 25% is a good starting point, but make sure you know what you intend to do with the money you save as you’ll then have a goal to be constantly aiming towards. Paying off your debts is great as you can see them tumbling down each week. Alternatively, if you’ve not been on holiday for a while – why not cut back enough to go away for a week or two. You might also get so addicted to this new vice that you might even want to cut your old vices back further and then you might be able to pay off your debts and have a holiday.
Stop being lazy
It’s far easier to get in the car to go to the local paper-shop, but you’re not doing yourself any favours. By walking or cycling you’ll not only save money by using less petrol but you’ll avoid unnecessary wear and tear on your tyres and your engine. Once you get a taste for walking you may well find yourself enjoying longer walks as an alternative to more expensive pastimes. If you enjoy cycling, or used to, you might also want to consider cycling to work rather than taking the car – though perhaps summer would be a better time to start doing this.
Want more tips to get financially fit for the New Year? Check out our financial boot camp!