ï As 2014 draws to a close, more than a third (35%) of us will be facing January with a financial hangover, having over-spent at Christmas by an average of £207. That – combined with almost 80% of us having been paid early in December – can result in many struggling to make their money stretch until the end of the month. In fact, more than half (53%) of those paid earlier than usual in December struggle to meet their bills by mid-January. As we move into 2015, half of us (49%) will dip into our savings to cover the shortfall, and more than a third (36%) will choose to use credit.
ï Julie Doleman, Managing Director, Experian Consumer, UK&I, commented: ìOver-spending at Christmas can happen easily, with unexpected costs building up quickly. For those facing into January with a financial festive hangover, itís important to understand how your spending decisions over the coming weeks might affect you in the longer term. Starting off on the right foot now will help you get the most out of your New Year right from the beginning, allowing you to make progress towards achieving your goal ñ whether thatís saving for a big purchase or life event, or simply getting your finances under control.î
ï Here are some simple tips from Experian to help people manage their New Yearís spending and get 2015 off to a bright start:
1. It can be easy to overspend at Christmas; however, the fastest way to get back in control of your finances is understanding them, and thatís where a budget comes in. Understanding exactly how much money you need to spend on bills, credit repayments and essentials such a food and heating, will help you plan out when and how you intend on spending any remaining money. This alone will really help you avoid overspending and will also help ensure you have enough to cover your bills and credit repayments, avoiding late or missed payments on your credit report.
2. The impact of missed or even late payments on any credit you currently owe can be significant as that information will stay on your credit report for six years and could affect any future credit applications you had hoped to make. This will not only affect your chances of getting credit at all, but also if you are offered credit you will be charged a higher interest rate. So, if you think you are going to struggle to make the minimum payments, speak to your lender as soon as possible to let them know and limit any potential impact
3. If you plan on using credit to bridge the gap until pay day, stay within any agreed credit limits, try not to max out any credit cards you have and remember to bring your balances back down to below 35% as soon as you can so that you donít negatively affect your chances of getting any credit you may need in the future.
4. And finally, if you need to apply for a new credit product it is so important that you check your own credit report first to ensure everything is accurate and up to date before you apply for credit.
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