Your 2017 10 step financial detox

posted by in Budgeting

Now that we’re in a fresh New Year, it’s all about clean slates, resolutions and working towards being our healthiest in all aspects of life, including money. There’s no better time to give yourself a financial detox!

Let’s make this year the one where you conquer your money woes once and for all. We’ve put together a list of ten financial detox tips to keep you on track…

  1. Write down your financial affirmations

Numerous studies have shown that writing your goals down can make it easier to achieve them. Once you’ve written them down, put them somewhere visible such as the fridge door or hallway mirror. The other advantage of this is that you get to tick off each goal as you achieve it, which will hopefully boost your motivation to stay on track and avoid any splurging or credit temptations.

  1. Purify your spending with a budget

By putting together a budget, you’ll have a much a clearer idea of where your finances are going each month. It’ll also help you understand how much you have available to spend or offer to pay towards any unsecured debts you may have, or how much you can put aside as savings.

A budget only works if you’re realistic with the figures you’re putting in. Don’t fudge it!

  1. Trim the pounds where you can

Take a look through the items on your budget to see where you can cut back. You may have direct debits going for things you don’t really need or you’ve forgotten about completely. Cancel them!

Could you be spending too much on your utilities? Shop around for a better deal. If you have a satellite package or your mobile phone contract is due for renewal, see if you can wrangle a cheaper monthly package out of the provider. The squeaky wheel gets the grease, after all.

  1. Identify toxic spending habits

If you’re guilty of a ‘boredom shop’, or dabble in some online shopping after a hellish day at work, then you may have a toxic spending habit. Try keeping a diary to not only record how much you spend on these impulse purchases, but what possibly triggered the impulse in the first place. You’ll quickly identify your ‘toxic spending catalysts’ and figure out ways to avoid them. You may even spot opportunities to save even more money.

  1. Fire up that emergency fund

One-off expenses have a nasty tendency to catch you off guard. It’s in situations like this where many people turn to high cost credit such as payday loans, and they can often make the problem much worse!

Starting an emergency fund could protect you from a nightmare situation, and prevent you getting further into debt. The key is to be realistic, even if it’s a couple of pounds a week in a jar. Have a think about the different ways you could save. For example, your employer might be able to deduct an amount from your wage and pay it into a separate account.

  1. Quit juicing your overdraft

Once you’re deep into your overdraft, it can be tricky to pay off. The interest that’s charged can cost more than other forms of credit. What’s more, overdrafts are ‘repayable on demand’, meaning that the bank can take the facility away if they feel you’re not managing it properly.

If you’re struggling with an overdraft, consider moving to a basic bank account with another bank that you have no debts to. Once you’ve done this, you’re then in a much better position to pay off the overdraft at a rate that’s realistic.

  1. Explore the benefits

Are you sure you’re claiming everything you’re entitled to? People up and down the country miss out on thousands of pounds worth of benefits every year because they’re unsure or unaware of what they can claim.

Use this handy benefits checker from StepChange Debt Charity to find out what benefits you may be missing out on.

  1. Show those bad habits the door

There’s no better time to pack in those bad habits from last year, especially if they’re costing you money.

The cost of cigarettes for instance is going up all the while, and a 10-a-day habit can easily cost you thousands of pounds a year! If you need support to quite smoking, visit the NHS Smoke Free website.

If you’re struggling with other bad habits such as consuming too much sugar or alcohol, your doctor can put you in touch with support groups in your area. If you’re dealing with a gambling problem, our friends at Gamcare can help.

In addition, have a think about what kind of rewards you can give yourself as an alternative to the habit you’re used to. Could you spend some of the money you saved on something nice like a haircut, or fun activities with the kids?

  1. Find some kindred spirits

Few battles in life are won alone, and getting a better grip on your finances is no exception. There are lots of people out there who are trying to be more masterful with their money, just like you. Visit the MoneySavingExpert.com forum, especially the Debt Free Wannabe forum, to chat to like-minded folk about a whole range of money and debt related issues.

  1. Seek wisdom on your debts

For over 20 years, we’ve provided free and confidential debt advice and solutions to over two million people. Our online advice tool Debt Remedy can help you put together a personal action plan to deal with your debt in around 20 minutes. Alternatively, you can talk to an advisor about your situation and work through a budget by calling our Helpline.

Need debt advice but feel a little daunted by it all? Sign up to our 7 Days, 7 Ways email programme. It will help you prepare for debt and budgeting advice step by step.

However you try to detox your finances in 2017, good luck. You’ll feel better for it!

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Rachel Connor has been with the charity for over 8 years, starting in Helpline before joining the MoneyAware team in 2012. Rach enjoys travelling, video games, watching anime, reading and creative writing in her spare time (currently writing a Young Adult fantasy series). She had a previous life as head writer on Cartoon Network's Ed Edd n Eddy and as a copywriter for LivingSocial. She's also written comics and graphic novels for the animated series Regular Show.

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Tags Budgeting
  • Always good advice about overdrafts – as costs seem low, they’re often ignored as a debt. But monthly charges soon add up!