How... to survive a debt hangover this month

JANUARY is a challenging time – particularly if you’re nursing a debt hangover after over-spending at Christmas. One-in-six (16%) people say they are likely to fall behind in January as a result of Christmas spending, according to National Debtline, run by charity the Money Advice Trust (MAT).

Some will have been paid early in December, in time for Christmas – meaning they will be attempting to survive a five-week gap until the next pay day.

The independent Money Advice Service (MAS), another debt-help body, says it expects the number of people seeking debt advice to peak around this time of year.

Last year, the service helped nearly 2.3 million people during January compared 2.1 million in an average month – a 10% increase.

Nick Hill, advice manager at the MAS, says people can use the service’s online “debt advice locator tool” to find out what free debt help is available in their area.

Here are its five top tips for getting January finances back on track:

SET A BUDGET. The first step to taking control of your money is working out your living costs, including knowing what’s coming in, what’s going out and when. Look at all your regular spending and keep track of it throughout the month.

CUT BACK. While it can be difficult to increase the amount of money coming in, you have more control over what goes out. Avoid the January sales and cook at home rather than spending on takeaways and dining out.

HAVE A CLEAR-OUT. You could also look at items at home that you no longer need, or sell unwanted presents to raise some extra cash.

SWITCH. A household can potentially save hundreds of pounds each year on home bills, so don’t underestimate how much you could save by switching energy suppliers.

TAKE CONTROL OF DEBT. If you have loans or owe money on credit cards, it usually makes sense to pay off the debt that charges the highest rate of interest first.

If you find yourself going in to your overdraft, make sure the costs don’t spiral, it is important to manage an overdraft just like you would with any other debt.

If you are worried about your debt, get advice as early as you can before the situation becomes worse.