How to get your finances in shape after Christmas
It isn’t a secret that Christmas can be one of the most expensive times of the year, especially if you have a family. 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) back to the gym to 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 (even if you haven’t quite made it to the gym yet – the Guru is very forgiving).
1. 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!
2. Think about taking out a short term loan
If you have spent far too much over the Christmas holiday and might be struggling to meet payments and deadlines over the next month, another solution might be taking out a short term loan. Whilst this isn’t the most ideal, it can actually really help in the short term, as long as you’re willing to manage your finances effectively.
That means planning exactly how much to borrow and calculating how long it will take you to realistically repay the amount. If you can commit to the repayments down the line it can act as a comfortable stop gap between now and your next payday.
Please note: only take out a short term loan if it is genuinely the best option for you. It can be an expensive way to borrow and can lead to a cycle of monthly debt if left unmanaged. Find out more about 6-month and 12-month short term loans here.
3. 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.
4. Find out your credit score
Thinking of taking out a new financial product in 2019? 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.
5. 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 2019.
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 2019.
Written by Robert Bester
Published on 23rd January 2019