No one likes a Monday, but the third Monday of January - otherwise known as ‘Blue Monday’ - is said to be the worst of them all.
The financial hangover after the Christmas period and a long gap between pay days can bring the worries we may have around our personal finances into the forefront of our minds.
To provide insight around ways to manage this and help you get in a better financial position for the rest of the year, Sally Conway, Head of Consumer Communications at Shawbrook Bank Personal Loans, shares some useful tips to help tackle your finances head on.
Prioritise paying down debt
Most people have some form of debt in the UK - from mortgages to short-term debts such as an overdraft or credit cards.
However, although having debt can be common, it can be a problem if it becomes unmanageable or is causing you to worry. That’s why it’s important to tackle any debt problems to help improve both your financial and mental health.
The first step to reducing your debt is gaining a better understanding of your financial situation. Although this can be daunting, get organised by listing everything you owe and then you can create a plan to clear it.
It’s important to remember you’re not alone in this situation. Seeking support can help you to put your problems into perspective and work out how to tackle them. If you find your situation has become unmanageable and you’re concerned about keeping up your repayments, the first step is to talk to your lender. For further support, there are also charity organisations who offer support such as Step Change or National Debt Line. Take some time to research your options, there are plenty of different ways to manage debt including a debt consolidation loan or creating a debt management plan.
Set yourself goals
Once you’ve come up with a plan to clear any debts, figure out what else you want to achieve in 2022 and map your goals for the year.
This can help to motivate you to save more and setting them early in the New Year will enable you to start the year as you mean to go on.
Take some time to review your saving or spending patterns from last year and ask yourself what did and didn’t work in 2021 to consider how you can adapt your approach to achieve these goals.
Creating a budget is a great way to kick-off the New Year. There are plenty of free online tools or financial budgeting apps that can help you to grasp how much you’re spending and what you’re spending it on. Or you could opt for a tried and tested spreadsheet to track your expenses and help you to start thinking about your money in the right way.
Check your credit score
Checking your credit score is another good way to assess your financial situation. It’s also a good way to ensure your personal and account information is correct.
By taking a proactive approach to managing and improving your credit score, it could mean you’re more likely to be accepted or offered better rates for credit. Lenders will use this information along with other checks to decide if you’re eligible for the line of credit you’re applying for.
There are lots of companies who offer free credit reports including Equifax and Experian. You should bear in mind that credit reference agencies tend to use different formulas and can source different data which means your score may not be the same across all of them.
Make smarter savings
Get into the ‘new year, fresh start’ mindset by starting the year with a refresh of all your subscriptions or regular outgoings that you might be able to cut back on.
You could consider removing or pausing subscriptions that you’re no longer using to cut your monthly spend – but make sure you double check for any fees before cancelling.
Most streaming services like Netflix, Amazon Prime and Spotify offer packages to use their services for multiple people from the same household at a time so sharing the cost of one account could be more cost-effective.
As part of this, you may also want to review your household bills to see if switching to a different provider could help cut costs. There are plenty of different broadband, energy and insurance companies offering competitive rates, so it’s worth checking to see if you can secure a better deal.
Start planning an exciting project
Another way to get you through the January blues is to plan an exciting project for the near future.
Why not get creative and think about saving for a home improvement? Even if you’ll need to save for a while before you start renovating, there’s nothing stopping you from looking for design inspiration, weighing up the cost of a new bathroom or kitchen and creating an attainable budgeting plan for the future.
Or maybe you, a close friend or relative is getting married soon. Planning for the big day is such an exciting time - and if it makes January a little more bearable, then you might as well get ahead of the game.
We all need something to look forward to, and January is the perfect time to map out those life-changing moments to make sure you can save and budget for them with plenty of time to spare.