How to survive the January money pinch
January is always a hard month: we’ve just had the Christmas expenditure...
Don’t be a direct debit juggler!
Don’t drop your balls
One of the first signs that your budget isn’t working is that you start to do the direct debit juggle. With Christmas just around the corner it might seem like a good idea to cancel the Council Tax direct debit or a utility standing order and restart it after Christmas.
After all, this will surely give you that extra bit of cash you need for presents and parties over the festive period, won’t it?
Juggling isn’t a very good idea
When the Council Tax department write to you in a couple of weeks’ time they could demand full payment for the whole amount owed. And if that isn’t paid then it could have serious consequences.
The utility company will add the extra money owed onto your next monthly bill if you’re lucky. If you’re unlucky they could take other action including adding extra charges that could push you further into debt.
Even skipping the humble TV licence could you see you landed with a £1,000 fine.
By cancelling direct debits to get some extra cash you’re only making your situation harder in the future.
You’re still going to have to pay
This doesn’t just apply to people in a debt solution; it applies even if you don’t have any debts and are just struggling with the ever-rising costs of everyday life.
By messing around with your regular monthly priority payments you might feel you’re playing the system a little, but what you’re doing is pulling the wool over your own eyes.
We counsel clients every day that started to get into problem debt by cancelling a priority payment here or there. It might have began with one month’s missed Council Tax payment and spiralled from there.
And non-payment of Council Tax is one of the few debts that can end with the debtor being given a custodial sentence.
One minute you’re juggling, next you’ve dropped a ball
If you’re thinking of juggling with your priority household payments we’d advise that you look at your income and expenditure budget straight away. A properly composed budget will make life much easier. We can help you with this.
Expenses that are charged annually should always be accounted for in a budget like this (that includes saving for car MOTs, tax and insurance). A budget should also include a small amount for unexpected expenses, along with Christmas and birthdays (if surplus is available).
If you’re on a debt management plan with us we also look at the likes of optical and dental costs that have to be paid for out of the blue. We try our best to make all our clients’ budgets sustainable and realistic. Things may be tight but we don’t want you eating beans on toast all year round.
We ask that clients use the budget and put any money aside to wait for the time that it’s needed. This means you’ve got the necessary cushion for unexpected expenses and don’t need to end up juggling and possibly ending up being landed with fines, charges, or a January where you have no money for food, not even beans.
Juggling can have consequences
Payments that are seen as a priority in your budget should be treated that way. Priority means that they’re important and non payment of these, even for one month, could worsen your situation.
If you’re thinking of juggling to splurge on Christmas presents you should know better; if you’re juggling because you have no other way of surviving the next few weeks then it’s vitally important to put together a realistic budget that covers all your priority bills now.
You can put together a budget and look at solutions by using our online debt help tool Debt Remedy.
