You might have woken up today to an experience shared by millions of other people in Britain, the first post Christmas credit card bill has arrived.
For some, there will have been days of mounting dread and sense of foreboding. However, this is actually the moment in the year to be proactive, positive and practical.
Instead of worrying or being stressed, it’s a moment to embrace organisation, planning, saving, and making 2015 a year of financial success.
Work out what you owe.
In order to get into a strong financial position for the coming year you need to be able to assess your liabilities and get a clear picture of your debts.
If you have more than one credit card, store card, or loan, work out the total amount owed on each and start with the debt that has the highest rate of interest (this is your greatest liability).
Devise a budget.
Maybe more of your income now needs to be devoted to debt repayment, so you need to work out what you can afford from your monthly wage.
Look at your incomings, outgoings and identify luxuries that you can do without .
Streamlining your spending is quite an empowering experience and you will be amazed how much money has gradually trickled away while you haven’t been watching.
Don’t borrow any more until you’ve repaid what you owe.
If you remember one thing from this article and discard the rest, let it be this golden rule. Despite what lenders might tell you, you cannot borrow your way out of debt. Lenders exist exclusively to keep you indebted
Keep track of your spending.
Staying on top of your spending habits is the way you will ultimately triumph. Debt can be caused by one off purchases of plasma televisions or sports cars, it can also be caused by constant monthly overspends – £50 here, £100 there.
This kind of spending is emotion based (much of our spending is pretty irrational, and shops and advertisers know it), but it does not mean you have to be a slave to it.
Instead, you need to make sure that you ask yourself a question with every purchase: “Is this a need or a want?”
Then ask: “Do I really, actually need it?”
Consider Switching your providers
One quick way of freeing up spare cash to commit to bringing down household debt is to review your utility providers.
By using price comparison websites you can find whether you are getting the best deals on your gas, electricity, phone, and car insurance.
You might even want to see if shifting your bank account can result in lower charges or higher rates of interest.
It might also be worth investigating whether or not you can move your mortgage, as the loan on your property is the biggest debt you are likely to have.
If you need some advice about how best to manage your money, why not talk to a qualified financial adviser ?