Last updated: May 31, 2023
If 2018 is the year you’ve decided you’re going to sort out your finances, then good for you. Being in debt is a crushing feeling, and it can sometimes feel there is no light at the end of the tunnel. I have been in a great deal of debt before (twice!) and know how that feels. Fortunately, there is always a solution. Here are some options for getting out of debt in the New Year (or not getting in debt in the first place before that starts).
Face Your Debt
The first step is to look at any existing debt that you do have. Facing your debt and making a budget is one of the most important first steps towards financial freedom. If you keep your head in the sand, your situation won’t improve at the rate it could. There’s always a solution to debt. If yours is spiralling out of control, make sure that you seek professional financial advice. Don’t suffer in silence because help is available; for example, with a Debt Management Plan (DMP).
Don’t Overspend At Christmas
This time of year is incredibly expensive. Even when I say I’m not spending a lot this Christmas, those extra costs still creep in. Food, drinks, meals out, the presents you forgot you had to buy….it ends up costing so much more than it has to. There are lots of ways to be frugal at Christmas and make sure that credit card doesn’t see the light of day. It’s important to set a budget for Christmas if you don’t want to spend over your means. Create a list of everything you need, and be aware that commercialism is not what Christmas is all about. There are lots of ways to have a good time without buying mountains of gifts. Set your budget and gift list, and stick to it. You’ll be glad you did when the day has come and gone.
Have A Money Makeover
January is a time of new beginnings and fresh starts. Use the lull at the start of the year to have a complete money makeover. Look at all your outgoings and see where you can save money. Utility bills, car payments and insurance can all be lowered in most cases. If you do have some debt, you can channel the extra cash you save into paying these off quicker. You could save hundreds a year by switching suppliers and cancelling subscriptions you don’t need.
Have A Budget In Place
To pay off debts as quickly as possible, you must have a budget that you stick to. Try to pay off as much debt as you can by throwing all your spare cash at it. Go for the higher interest debts first to reduce the amount you need to pay off overall. Ensure you stick to your budget by tracking everything that you spend, and allocating set amounts towards certain things like food and entertainment. You will start to feel more in control of your finances once you start operating within your budget, and it will ensure you do not go further into debt.
Learn To Live Frugally
Thriftiness doesn’t have to be boring. There are lots of ways to enjoy some of the finer things in life without spending money. Look for ways to cook nice meals on a budget, and see what bargains you can find in charity shops. One of the ways I enjoy little treats is by winning competitions. It’s a completely free hobby if you want it to be, and I’ve had so many nice wins over the past few years from hotels stays to vouchers. I often share my top tips for entering competitions.
Here’s to a debt free future!
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Ashleigh Allan says
Great tips. January plus depressing enough without having to start the year in debt
Melissa | At Home & Online says
Absolutely! January is such a long month after payday so it’s easy to get into debt at this time of year.
Lynda Graham says
Glad I’ve come across this clever blog
Thanks for tips.
Melissa | At Home & Online says
Thanks Linda, I’m really glad you like it and hope you find some useful posts here.
Margaret Gallagher says
So far so good this year – managing so much better – any advice is welcome
Good ideas. I love supermarket vouchers and have a special check out lady in tescos to help me out without causing a fuss!