Today, 15 January, is reckoned to be the gloomiest day of the year; but don’t feel as though there is nothing you can do to fix your personal finances.
Your email inbox is piling up, New Year’s resolutions are already broken, and your next day off is months away. These are typical factors that contribute to the ‘Blue Monday’ phenomenon, so-called because it is seen to be the most disheartening day of the year.
But another factor that contributes to the feeling is the financial mess that some people find themselves in following the Christmas period.
Many rely on credit cards or overdrafts to make it through Christmas and come January are left with balances in the red and interest charges imminent.
However, there are ways to get out of the lull. Sarah Coles, personal finance analyst, Hargreaves Lansdown comments: “Millions of Brits will recognise this time of year as the point when they start to feel the pinch. For those who spent a good portion of their December pay bringing their current account to zero, they may be hovering at the cusp of an overdraft.
“For those who put at least some of their Christmas spending on plastic, meanwhile, it’s also the period when credit card bills start to arrive. Whether we call it ‘Blue Monday’ or the less catchy ‘The day I realised just how much Christmas cost’, the effect is the same.
“The good news is that if we take action now, this can be as bad as our finances look all year. We can take control of our budget and our debts, pay off the cost of Christmas, and start to build up some savings, so that expensive times of year don’t push us into the red.”
Here are some tips to help relieve the feeling of despair and get your money in order:
1. Don’t go further into debt
If you have an unpaid balance on your credit card, or are in an overdraft, spending more will just lead to higher charges, making it more difficult to repay.
If your credit rating is good, apply for a balance transfer card, transfer your card debts to it and pay the debt at the 0% rate. This will make repayments much easier and more affordable.
Your goal should be to pay enough each month to clear the balance within the interest-free time frame, as what is left over will be moved onto a much higher APR at the end of the offer.
If your debt is in an overdraft, a 0% money transfer card might be better, but interest-free periods tend to be shorter here than for balance transfers.
2. Work out what you can cut back on
Keep track of your expenses by making a spreadsheet or keeping a spending diary. If you can work out where you are overspending, you will be able to cut down quickly.
Consider banking apps such as Monzo or Starling Bank which track your spending for you and tell you how much you spend on purchases such as eating out and groceries.
Having your money visualised can be hugely relieving, and is easier than just trying to figure it out in your head. However, if you feel your debt is spiralling beyond your control, charities such as National Debt Helpline and StepChange offer free advice.
3. Remove temptation
Once your spending and debt repayments are under control, remove further temptation by restricting your access to your credit card or cards.
One tip is to put your cards in a bowl in the freezer. This way, if you want to use your card, you’ll have to wait for the ice to melt giving you time to mull your purchase over.
Cutting up cards is another solution, although this may not be the wisest idea given you might need one for an emergency.
Mental Health UK launches service dedicated to those with mental health and money problems
In similar news, Mental Health UK research has found that of those who suffer from mental health issues, nine in 10 wanted help with money questions and problems. For this reason, the charity has this week launched a dedicated service for those with mental health issues who need money advice.
Brian Dow, managing director of Mental Health UK, says: “Money problems and mental health issues like anxiety and depression can create a vicious cycle where problems can spiral. At its worst this can lead to debt, family breakdown and even homelessness.
“This is why we are launching this first of its kind service; to provide some of the eight million people who are affected with somewhere to turn to. Somewhere they can get advice they can rely on and specialist mental health support."
To find out more about Mental Health UK's free mental health and money advice service and how it could help you, go to: https://www.mentalhealthandmoneyadvice.org/