Each year, StepChange Debt Charity, one of the free debt advice services that we support, encourages us all to think about how financially fit we will be for the year ahead. They are offering a programme of daily e-mails for a week to help people to understand their financial situation and some very practical steps to improve their situation.
At MYJAR we have always encouraged our customers to do what they can to take control of their own finances. We recognise that sometimes, what look like easy ways out (borrow a bit more, don’t open the bills and the banks statements, try not to think about it), never really offer a long-term solution.
There are a few simple steps we can all take to improve our financial health. We might not end up as millionaires but if we can start the new year confident about our money and clear about the steps we need to take, that is half the battle won.
Firstly remember that it is not as hard as it might seem to make a start. Set aside an hour or two of quiet time and think honestly about the money you owe. Some of it might require long-term and fixed payments that can be easily planned for. There might also be other payments due that are more pressing – the credit cards after Christmas and the overdraft close to its limit. Have a really honest look at everything you owe and decide what should take priority.
Obviously, the mortgage is more important than the gym membership that you took out ages ago and never use.
Next think about your income and how much you can rely upon to get weekly or monthly income and what you need to pay out. It’s important to be honest and realistic. If the overtime is just a possibility but not certain, don’t include it in your calculations – when and if it turns up, it will be a nice bonus. When you are working out the outgoings, don’t just include the big regular bills but remember the one-offs like a meal out, extra bits of shopping, the occasional takeaways.?
Once you know how much you owe, what you need to pay out and how much is coming in you can get a realistic view of your situation. If it looks as if you are not going to make ends meet, don’t worry. Millions of people are in the same boat and it is only by understanding the problem that you can decide upon a solution that suits your circumstances. If the numbers really do look hopeless, you can always get help. There are plenty of sources of free, great quality help.?
You might find that there are some bills that you are going to struggle to meet when they fall due. If that is the case, it is always sensible to call the company you owe money to and explain your situation. Banks and credit card companies are always happy to work with people who are trying to act responsibly and take control of their money.??If you do think that you might need to make some cuts, think honestly about where the savings can come from. Some savings will be easier than others to make and trying to do the impossible can just lead to disappointment and frustration and lead you to give up.
Once you have decided on a plan of action, write it down and try to stick to it. Monitor your progress and, if things aren’t working, see what you need to change to achieve your objectives.
Getting back in control of your finances isn’t easy but it can be very rewarding. Nobody will ever miss that feeling of worry when the bank statement or credit card bill lands on the doormat or picking the phone up to people chasing for missed payments.
It might seem a daunting task but it is never too soon to take control and you never know, 2016 might just be the year that you look back on as the year that you made the change.
Why not have a look at the Stepchange 7 days, 7 ways programme. It’s is free, completely confidential and it really could change your life! Stepchange - 7 days, 7 ways
Happy New Year.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk