How to get your finances in shape after Christmas
Written by Robert Bester, Consumer Finance Expert Robert has been a writer for six years, specialising in consumer finance and the UK lending market. Concentrating on consumer credit products, Robert writes informative articles that help customers manage their personal finances efficiently.
2nd August 2021
4 minute read
It isn’t a secret that Christmas can be one of the most expensive times of the year. Once you’ve tidied the house, wrapped the presents and somehow had time to put up the decorations, you’ll feel as drained as your accounts.
But now that you’ve had a bit of time post-Christmas to get yourself off the couch, back to work and (gulp) do some exercise, perhaps it might be the right time to do the same with your finances. Back to reality and back into shape again.
Below we’ve put together a few snippets of wisdom to get you thinking about your finances once more, so you stop avoiding looking at your accounts for fear of what you might see. So, get stretching, slip on a sweatband and get ready to get your finances exercising again. Why not start off by making a new financial resolution for 2021?
Make a financial resolution for 2021
Is there a savings target you failed to reach in 2020? Or is there something you would like to achieve with your finances in the new year? There are plenty of financial resolutions you can make and will help you keep motivated to improve your financial situation. Here are some examples below:
- Open a savings account and reach your goal
- Make your first investment
- Switch to a better current account
- Pay off your overdraft
- Improve your credit score
- Take control of your debts
- Find a better mortgage deal
Seen one you would like to pursue? Use the links to start finding out more about these financial resolutions or keep reading for other ways in which you can improve your finances in 2021.
Make your spending easier to manage
Christmas is usually the time for overspending on credit cards and other store cards, not to mention your own personal debit card. While this isn’t uncommon, it’s worth putting right in January so you don’t end up being penalised in the future, or incurring further charges from late or missed repayments.
A 0% Balance Transfer credit card is ideal for those thinking of consolidating multiple payments into one. Depending on the card you choose, you should be able to secure a period of time where any balance transfers will not incur any interest. This means you can stop watching your debt grow and put it on pause, while you pay it back at your own rate. You can even find a deal where you won’t be charged a fee for doing any transfers too.
Like any good financial guru, make sure you plan ahead and aim to pay off the outstanding balance by the time the 0% interest period finishes. This means you can clear your debt, and be in a more stable position financially: how’s that for a resolution!
Start saving for Christmas 2021
If you struggled to afford Christmas 2020, you might want to think about planning ahead for the next one. After all, you have 12 months to save and there’s no better time than in January to set up a new savings account to reach your goals.
First off, find a savings account that suits you. They usually vary from Easy Access savings accounts that you can deposit and withdraw from whenever you like, to Fixed Rate savings accounts that are locked until a certain period has elapsed. The benefit of locking your savings away is that you will get a better return on investment. Alternatively, for an even better return but with added risk, you could try a Stocks & Shares ISA. Just make sure you understand the terms of the investment before you sign up, as sometimes you could end up with less than you deposit.
Start planning to pay off existing debt
If you don’t fancy switching credit cards but would still like to clear your debt, the best way to do it is start overpaying each month. Make sure to sit down and balance your accounts so if you cut back in some areas, you can afford the overpayments to clear your debt quicker.
Try and set up a direct debit so you know that you can commit to an amount each month. This will help you keep on top of the repayments and will also ensure you aren’t late in paying them, which can have more of a negative impact on your credit score.
Find out your credit score
Thinking of taking out a new financial product in 2021? Whether it’s a credit card, personal loan or mortgage, you’re best off checking how likely it is you’ll be accepted.
Getting a credit report will give you a detailed look at your financial history and highlight anything that might have an effect on your application for new funds in the future. You will get a score and a rating to show how trustworthy you look to lenders, along with things you can do to actively improve your score.
All in all, it’s advisable to have all your financial information at your fingertips prior to submitting an application. Rejections from lenders will not only confirm that you have a poor credit score and are currently seen as ‘untrustworthy’, but it will also negatively impact your score even further. It’s the financial equivalent of adding insult to injury.
Try a Credit builder card to improve your credit score
Have you found out you have a poor credit score? Hopefully your credit report will have given you some pointers on the best ways to improve your credit score according to your results, but a great way to improve it is to take out a Credit Builder credit card.
These cards are designed for those with a poor credit score to help them improve it. By using it and meeting the minimum monthly repayments, you can build up trust with providers by showing you’re able to pay back what you owe. Having a history of repayments will prove that you’re capable of handling financial products, subsequently building up your credit score.
I’m ready to get my finances back into shape
Now that you’ve got a few tips to help you get your finances back into shape, it’s time to actually do it! Start planning how to improve your finances and your credit score, and get a head start on your financial fitness for 2021.
Unsure what credit card you should choose? Head over to our moneymatcher online comparison tool to assist you in your search. Just by entering a few simple details, you will find a list of applicable cards for you to choose from. Better yet, it won’t affect your credit score one tiny bit.
Not quite sure where to start? Read up on how to face your financial fears in 2021.