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Avoiding the Festive Financial Hangover

Christmas is over, the leftovers have all been eaten, the tree is down and the decorations are safely stored in the attic ready for next year.  We’ve entered a whole new year, a time of new beginnings and resolutions to make this year even better than last.  However, some of us are feeling the brunt of the Christmas spending spree and worrying about how we’ll get through the first few months of 2019 and clear the debts we’ve taken on to ensure that our families have a great Christmas.  Now is the time to get your personal finances under control to make sure that this year goes with a swing, rather than being a damp squib of a year as we scramble to avoid falling further into debt.

The end of January is the deadline for filing your tax return and sending it in late is likely to result in a fine.  Get this task done and out of the way as early as you can to avoid a financial penalty and the worry of making the deadline.  Last year there was a final rush of people filing their tax returns at the very last minute, with more than 30,000 doing so in the final hour, according to HM Revenue and Customs.

Many of us begin the New Year with every intention of paying off our debts and avoiding even more financial worry in the future.  Avoid getting into more debt and make sure you’re aware of how you spend your money.  Using credit cards for household essentials like groceries can be a warning sign that you’re slipping.  Adopt a golden rule of not going into debt to buy something that will last for less time than it takes you to repay the sum borrowed.  If you’re already dealing with credit card debt (and so many of us are), try to regularly pay more than the minimum.  If you do feel overwhelmed by debt, the sooner you seek help from a debt advice organisation, the quicker you’ll be able to deal with it and put your debts behind you.

Switch service providers to find a better deal on utilities.  Some companies make this easy by offering to do this for you automatically and free of charge (or for a small fee).  Check your broadband and TV provider to ensure that you’re getting the best deal available and won’t be met with an automatic price increase at the end of a contract.  Comparison sites suggest that you can save up to £200 per year by switching and it may be worth breaking up TV and broadband packages and look for better individual deals.

Do a mortgage health check and, if you’re able to, consider paying more off your mortgage.  Many lenders will allow overpayment (usually about 10% of the loan) and, despite early repayment charges, you could save on interest.  Santander estimates that a £10 overpayment on a mortgage of £200,000 may result in saving £1,146 in interest, so this is worth considering if you have the funds to do so.

Use technology to help you budget and stay out of debt.  New tools and apps are available that will help you to set budgets and instantly notify you if you’re spending is straying towards danger levels that would tip you into debt.