If there’s one thing better than a good Christmas, it’s a relatively debt free New Year. Of course, when it comes to Christmas spending, too many of us go overboard, thinking that if everyone else is maxing out their credit cards, it must be alright? Well, yes and no, because come January, everyone’s also living on dry bread and water. Here’s how to avoid this annual debt trap. Oh and we bought a house too!

It’s not too late to start saving

There must be something that you waste money on. It could be a magazine that you buy out of habit and don’t pay much attention to, or you might have a serious bath bomb problem. Whatever it is, put it on ice so that each month you save that extra £10? £20? or even £30 perhaps? This is money that you haven’t thrown down the drain (literally, if you’re a bath bomb fiend) and that you can use towards holiday savings or towards paying off your January overdraft. If you’re not great at budgeting, visit Creditfix for their easy-to-use budget calculator.

Compile a strict ‘treats’ list

This aims to eliminate impulse buys. For that reason, your list must not be flexible. Whatever your weekly or monthly treats (e.g. takeaway food, cinema trips, coffee mornings, etc.), note them down, budget for them, and do not deviate from the list. Once you see how much money you usually try to spend above and beyond the things that you typically think of as your ‘little extras’, you will be very surprised.

Have a no-birthday-presents agreement with a few people

You’re not the only person feeling the pinch this new year. Make an agreement with a group of friends or branch of the family so that you’re limited to £5.00 or lower per birthday gift. Better still, try a no-birthday-gifts at all arrangement.

Have a military-style food shopping plan

This can be as helpful as the ‘treats’ list if you’re smart. If you have a few loyalty cards, make the most of it; buy one week of food and stock up the cupboards, then mount a second attack the next week using your points to make use of any vouchers or discounts you’ve earned.

If you manage to save any money, use it sensibly

If you do manage to stay well within budget each month, then well done to you. This doesn’t mean you have to blow any money you’ve saved, though! This extra means that you won’t be scrimping and saving until March!

If you did go into an overdraft or savings to help to pay for Christmas, use the money that you’ve saved to pay it off. Having debt costs money, so if you can reduce your debt earlier in the year, it’ll cost much less in the long run.Another great idea for your savings is to spend them. This might seem like a direct contradiction to the rest of the advice, but if you can hit the January sales and purchase essentials like wrapping paper, cards and perennial gifts like socks and jigsaws, you’re ahead of next year’s game already!

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Last Update: Thursday, 17th January 2019