Clearing debt, preparing for emergencies, saving for the future
There are three areas you need to tackle, which can loosely be grouped into paying down debt and making sure you don’t get into more debt; giving yourself a rainy-day cash buffer; and building your finances for the future.
Holidays can prompt a carefree approach to credit card spending. Home can seem a long way away, and so can the realities of bill payment dates.
If credit card debt has built up over the holiday, make sure you’re not paying astronomical interest rates. If you really can’t pay it off, consider switching to a card with a low or zero interest option (though watch out for the transfer fees - usually 2%).
Total pain, but really the only way to see where your money is going. Banks with smart apps, such as Monzo, do a good job of helping you monitor spending on your card, but even that won’t tell you where any cash is going.
Ultimately, writing down and paying attention to what you spend should highlight areas where you can make easy savings - useless insurance contracts, magazine subscriptions, two iTunes subscriptions (or was that just me?).
Money worries are an emotional drain. The Money Advice Service recently reported that, on average, British people lose 46 minutes of sleep a night worrying about money.
While you can’t manufacture money (still illegal, sadly), having a plan about how much you can spend and when – and how you’re going to pay down any debts – can make it easier. If it all looks too enormous, just commit to spending 15 minutes per day tidying up your finances until they’re in a better shape.
Karen Hogg, Head of Insurance at Sainsbury’s Bank, says understanding more about money can stop you worrying about it:
“There is no shame in not quite understanding financial products or needing more help to understand. Doing some research online or at a local library can help to improve your knowledge and feel more in control of your finances.”
Take a look through our simple money guides, and also check out The Money Advice Service.
No payday loans, no borrowing from friends, no ‘too good to be true’ investments (be wary of anything offering over 5% a year - risks will be high).
We’re all vulnerable to the sales messages of charlatans when we’re feeling poor, and it's no laughing matter when we start to feel desperate. But it goes without saying that you will more likely compound your financial problems rather than improve them. Err on the side of caution.
Your immediate priority should be giving yourself some financial headroom. That means three months expenses in cash (or in an instant access savings account or cash ISA). After that, you can start thinking about pensions and stocks and shares ISAs.
Once you have your debts cleared and a cash buffer in place, do some research into stocks and shares investments through a pension or ISA. Maybe do this in October when you’re not still dealing with the post-holiday comedown.
Our Best Buy tables are the best place to review providers based on customer ratings and our own expert scoring system. You should also try our super simple Investment Fee Calculator to make sure the providers you’re interested in are competitive for how much you plan to invest.
Especially if you’re investing for long-term wealth over, say, 20 years. Sustainable investments, in theory, tend to involve companies that are going to endure. Investment management firms are increasingly aiming to incorporate environmental, social and governance analysis, and it’s something you should be aware of too.
Ultimately, the last thing you need at an already gloomy time of year is to be feeling glum about money. Any small way you can give yourself back control is a bonus
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