New year, new finances

New Year is a great time to take an honest review of recent spending. Here’s a 7 step plan of action to improve your finances durng 2019.

Step 1: Assess the situation

You’re probably underestimating how much you’ve spent this Christmas. Property website Zoopla reckons four out of ten people do not know how much their monthly outgoings are. One in three admit to having ‘no idea’ how much they owe.

Step 2: Put your credit cards away

It takes 12 months to pay off a £1,000 (36% APR) credit card debt at £100 per month. That leaps to almost seven years if you only pay £30 each month.

It’s easy to overspend on plastic. But remember – credit cards do give some protection when buying goods; read more here.

See how long it will take to repay your cards off using the Money Advice Service credit card calculator:

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Credit card calculator

Step 3: Set a budget

Use the Money Advice Service Budget Calculator to get a realistic picture of your income and outgoings.

Budget Planner
Step 4: Seek advice if you are overspending

If your budget shows that debt repayments are causing real problems, remember to pay the priorities first; rent, mortgage, utilities, council tax etc. And then seek debt advice.

Step 5: Consider consolidating your debts

If you need to spread your debts over a longer period of time, or are paying very high interest rates on credit cards and loans then a consolidation loan might be the answer. Before considering such a course of action you can find some useful tips from the Money Advice Service.

Central Liverpool Credit Union may be able to provide a consolidation loans to help you repay your debt at a more affordable rate over a period that suits your budget.

Step 6: Avoid a debt hangover in 2019 – start saving

Stashing away £10 per week is an easy way to build a £500 budget for Christmas 2019. Giving up just a few bags of crisps or an alcoholic drink each week is probably enough to put aside a tenner.

Step 7: Sign up for more money tips

The Credit Union has a remit to promote financial education amongst our membership. Sign up for regular money tips to find more ways to improve your finances this year, using the form on the right hand side of this page.

You may also find these tips from the Independent useful. The Money Advice Service provide an online health check too.