January is often a depressing month for many of us. We are still in the depths of winter, Christmas and Hogmanay have both been and gone and worst of all, we are left with the expectation of a series of hefty bills at the end of the month. From high energy bills to the credit cards you used to fund those special Christmas presents, it’s easy to be daunted by it all. The key is not to let it get to you, and to follow our tips on how sort out your finances in January!
1) Firstly, sit down at the start of the month and try to find out how much your bills are going to be. For your energy bills, try looking online- most suppliers have a system that allows you to check how much you owe. Even make a note of your meter reading and compare it to the value on your last bill, so you can estimate how much it will cost you come the end of January. This will help with the next stages. You should also look up extraneous bills, such as credit card bills, etc.
2) Next, have a look at how much money you are going to have coming in this month, from benefits, income support or your wages. This will make up your income.
3) Then, make a list of all the essentials you need to cover for living expenses in January (this is where looking up your bills comes in handy). Bear in mind that you should only include your essential bills such as energy and mortgage etc. Try to account for as much as you can though and also be sure to think long and hard about whether what you’re spending your money on is an â˜essential’ or a luxury. This will make up your expenditure.
4) Once you have both of the above, then you can sit down and compare your income to your expenditure.
5) Whatever you have left over is what we call disposable income. This is where you can see how much money you have to service any credit card bills or loans etc. that you’ve taken out. You should be able to estimate how much your minimum repayment bill will be by comparing the balance of your card/ new purchases with your terms and conditions.
If your disposable income doesn’t cover the cost of paying towards your various credit cards/ loans then you know that have to do something about it. You can sometimes speak to your lender and ask about extending your loan period or maybe having a payment break, but often this is difficult to get. If you are in serious trouble then you need to seek some expert advice. Your Debt Expert offer free and impartial debt advice on a range of topics. So if you follow our guide, and still find yourself panicking, try out the debt calculator from Yourdebtexpert or give us call and we’ll help you sort out your finances.