We all enjoy the good things in life, from treating ourselves or the ones we love. But as we look forward to 2020 and beyond you don’t want to start the New Year with bills and debts you can’t afford. It’s all too easy to get carried away and overspend a Christmas – there are many tempting offers and pressures to buy particularly at this time of year. It is important to decide how much you can afford before you start spending.
Here are 10 ways to get to grips with your spending and managing your finances.
- Plan for special events – Be realistic and budget accordingly for these events such as birthdays, Christmas or weddings. Work out how much you are going to spend and stick to it. Manage others expectations if possible.
- Don’t forget the day-to-day expenses – Remember that rent, the mortgage, utility bills, food bills and other existing debts still have to be paid – and the consequences can be severe if they’re not. Try to prioritise and stick to them!
- Don’t rely on an overdraft – If you do need more money, don’t just run up an overdraft without talking to your bank first – it will work out more expensive in the end.
- Keep things simple – If you can afford to pay for your goods outright by cash, cheque or debit card, don’t be persuaded to put off paying for items by using credit agreements unless they really do work out cheaper.
- Shop around – Try as many different places as possible to find the best price, you could use price comparison websites for example such as Mysupermarket, Megashopbot or shop on the high street. But remember buy what you need, not what some clever marketing says that you need. Be wary of extended warranties; the cost of a repair could be less than the cost of the warranty.
- Buy safe to be safe – Whatever the deal, whatever the temptation, don’t buy from un-authorised traders or borrow from unauthorised lenders. The initial savings and convenience may prove to be more costly.
- Read the small print – Check for any hidden extras in a credit agreement. Work out the total amount payable over the course of the agreement and make sure that you can afford the monthly installments before signing. While interest free credit may seem attractive, you may have to pay a lot more if you don’t pay on time, or miss a payment.
- Check the details of any credit card repayments – If you are going to use a credit card, shop around and compare terms. Some cards charge high interest rates, but offer interest free periods or discounts. Budget for all these costs and make sure that you know the payment dates.
- Be organised – In life there’s always a lot to remember. If you’ve borrowed money don’t forget that it won’t be long before you have to make a payment. Make sure you pay on time, even if it is only the minimum, or you will be faced with additional charges.
- Review your spending/budgeting and learn from it – It’s worth looking at what you did well and what you didn’t. Learn from your mistakes and start planning how you will do things differently in the future. This might also be a good time to start saving for next Christmas!
Why not attend one of our CAP Money courses and find out more on how you can learn to better manage your finances. I’m sure that you won’t regret it!