Strategies to fight the January financial blues and regain monetary control

After the holidays, January hits a little bit differently. The parties are over, debt payments are due and it can feel like there’s nothing to look forward to.

You may be able to minimise the effects with some planning and other steps to turn things around, financial experts say.

“Financial stress can be temporary,” says Tonya Rapley, financial educator and founder of the millennial money and lifestyle blog My Fab Finance.

She suggests focusing on small steps such as paying this month’s bills and then reminding yourself that you can recover from December’s overspending.

The new year is a great time to create or update a budget, which can give you back a sense of control, says Mike Croxson, chief executive of the National Foundation for Credit Counselling, a non-profit financial coaching organisation.

The popular 50/30/20 budget, for example, suggests putting 50 per cent of your income towards needs, 30 per cent towards wants and 20 per cent towards savings and any debt payments.

You can adjust those percentages as needed, especially if you live in an urban area with high housing costs.

“The best way to get control back is to make a plan,” Mr Croxson says. “You can get back on top of this and back to where you feel good about your finances.”

With interest rates higher than they were a couple of years ago, credit card debt is also more expensive, which makes paying it off a financial priority.

How exactly you do that is up to you, Mr Croxson says.

“Paying off the highest interest rate balance first makes the most common sense, but for some people, paying off the smallest dollar amount first is most important because they feel like they accomplished something,” Mr Croxson says.

It’s also crucial to keep a tab on your payments.

If you purchased holiday gifts using buy now, pay later, which allows shoppers to split payments into instalments, then it’s important to note when those bills are due, says Christine Alemany, chief marketing officer for i2c, a global banking and payments platform.

Ms Alemany suggests tracking your due dates with a financial management tool or spreadsheet to avoid late fees or interest charges. “The variety of payment methods that consumers now have gives them the option to choose what’s best for them,” she says.

Amid repayments, it’s also important to find a way to save money, Mr Croxson says. “Having a savings line item in your budget is a critical step for virtually every consumer, even if it’s $20 or $25 a month,” he says.

Wayne Hassay, partner lawyer for LegalShield, a legal services provider, says it is critical to know your refund rights as a consumer if an expensive item you bought or received as a gift in December breaks in January.

He suggests keeping track of all papers related to the item and any warranty attached whenever you make a purchase.

In some cases, paying with a credit card can give you additional protections, he adds.

If your pricey new gadget breaks, don’t hesitate to follow up with the retailer or brand until you get a satisfactory response, which could be a refund or a new product.

Working to pay off debt and get back on a budget in January can feel lonely because it’s such a solo activity, which is why it’s helpful to reach out for additional support, whether that’s from financial professionals or friends and family.

“That communication is definitely important,” Ms Rapley says and can help you feel less alone.

Make a budget, pay off debt and continue saving to help you to recover from overspending in December, experts say