Brenda (not her real name) desperately wanted help with the debts she...
Your 2019 10 step financial detox
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…
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.
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!
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 digital TV 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.
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.
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!
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.
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.
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.
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?
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.
Changing your financial future is easier to achieve if your loved ones are also on board. Talking about money isn’t always easy, however. The Money Advice Service has some excellent guides to help you start those awkward but necessary conversations around money.
Stop lending out money you don’t have
You’re a kind person who cares about the people in your life. Kind people can often find it difficult to say no when asked to lend money to family and friends, even if it makes them struggle as a result.
This year, resolve to be kind but firm when it comes to lending out money. If you don’t have it, or if you’re not confident that the person asking is trying to improve their own situation, try saying no.
Take it from someone who frequently beats themselves up for not being able to fix everyone’s problems – saying no does not make you a bad person, and does not mean that you don’t care.
If your loved one is really struggling, let them know that emergency funding and food supplies are available.
Perhaps it’s you that owes money to loved ones. Are they your first port of call if you’re struggling financially? Money can have a negative effect on your most important relationships, so make sure you’re aware of all of the alternatives.
Bonus tip – 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 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 financial control programme. It will help you prepare for debt and budgeting advice step by step.
However you try to detox your finances in 2019, good luck. You’ll feel better for it!