The majority of Brits are not thinking about their Christmas debt hangover yet, as the seasonal spending spree continues.
However, credit card blues and post-Christmas cheer could leave you in the red from the moment you enter 2013.
The number of Britons who are worried about their personal finances is on the rise. However, a massive 40% are not making any New Year’s resolutions to manage their money more effectively in 2013.
Figures from the Institute of Financial Planning (IFP) show that only 13% of those polled said their household finances had improved in the last six months. The poll also found that 80% of people were worried about money this year, compared to just 60% in 2011. The number of people who rarely fret over money matters has also dropped significantly, from 35% in 2011 to 16%.
IFP research shows that almost half of those polled said they are not making any financial New Year’s resolutions, as people are concentrating more on the present rather than planning for the future.
Some 30% of people said they were planning on reducing their monthly spending in 2013 and a fifth (20%) plan on saving each month. A further 19% said they hope to pay off credit card bills and other debt.
Rebecca Taylor, President of IFP said: “As we’ve recently emerged from a double dip recession, it’s no surprise to see that so many people are worried about their finances. However, I am surprised to see that more people are not preparing to do something to improve that position. Financial Planning isn’t just for the wealthy, it’s for everyone.
“These are very tough times but that just means it’s more important than ever to take control of your finances – and not let them control you.”
If you are looking to take more control of your finances in 2013, here are a few simple budgeting tips.
1. Don’t take on any more debt
If you plan on funding the festivities on finance, then you might face some sky-high bills come January. Paying off Christmas cheer can stretch well beyond the festive season and hit your pockets particularly hard if you are paying off debt with high interest. The last thing to do in this situation is add more debt to your name.
2. Only spend what you can afford
Yes it seems obvious but credit cards, personal loans, overdrafts and other means of borrowing can be incredibly useful, particularly in emergency situations. However, a worrying number of people are using these products to cover everyday costs. Times are tough and hard-up households need to make ends meet, yet one way to balance the books is by making sure you only spend what you can afford.
By not watching what you spend- you could quickly spiral into debt. At the same time, you can make your money go further and be smart with your purchases.
For example, should you wish to make big purchases such as a sofa during the Christmas sales, it could be worth taking advantage of an interest-free purchase period for credit cards deals. To fully enjoy the benefits of a credit card, it would be advisable to meet monthly payments.
3. Save, save save!
Savers have had a very raw deal over the last 18 months as the recession, high inflation and low interest rates have eaten away at any chance of a return. Nonetheless, without savings you have no financial cushion or safety net. Who knows what financial mishaps 2013 could bring? It may be advisable to stash your cash for a rainy day, which in this economic climate is more often than not.
The ISA season is about to kick off with new rates set to become available at the start of April, so watch the ISA trends to make the most of a tax-free investment.
Compare savings accounts and ISAs with Propertywide.
4. Financial flush-out
Why wait until spring to clean up your finances when you could flush out any unused and unnecessary outgoings right now? It could be worth cancelling any direct debits you no longer use, such as old gym memberships and subcriptions.
5. Shop smart
Budgeting doesn’t mean you have to live on the breadline. By shopping smart you can make your money go further. For example, why not buy own-brand store goods instead of branded ones, the majority of the time you can’t taste the difference.
Take advantage of deals, vouchers and discount codes which are widely available on the web and can be used in restaurants, entertainment trips and family days out.