How to save and spend:

The Sunday Post (Newcastle) - - NEWS -

Christ­mas is over for an­other year – and right now, your bank bal­ance may be look­ing worn-out af­ter all that fes­tive spend­ing.

In fact, many peo­ple will be won­der­ing how they’re go­ing to stretch what’s left un­til their next pay­day.

But while it may feel like we’re doomed to re­peat the same spend­ing pat­terns year af­ter year, 2019 could be the one when ev­ery­thing changes.

Here, Sarah Coles, per­sonal fi­nance an­a­lyst at Har­g­reaves Lans­down (hl., sug­gests 10 steps to get your spend­ing back on track...

1. Start a spend­ing di­ary

Most of us find it dif­fi­cult to work out where our money is go­ing. Keep a spend­ing di­ary for a few weeks.

Mark each ex­pense as es­sen­tials you can’t live with­out or lux­ury spend­ing. Keep a note­book handy, or use an app.

2. Shop around for es­sen­tials

You can’t cut out es­sen­tials like util­ity bills but you can re­duce costs by shop­ping around. You can shave hun­dreds of pounds off an­nual bills.

3. Cut out lux­u­ries

Your morn­ing take­away cof­fee, Fri­day-night drinks or Satur­day take­aways aren’t es­sen­tial.

If cut­ting them out feels painful, bear in mind that by ditch­ing your morn­ing cof­fee, or only go­ing out ev­ery other Fri­day, you can save enough cash for something else fun – such as a hol­i­day.

4. Pay off debts

When you’ve cut your costs, pri­ori­tise pay­ing off any ex­pen­sive debts.

Har­g­reaves Lans­down’s re­search shows that of those peo­ple who set a bud­get for Christ­mas, 57% of them spend more than they bud­geted for.

More than one in 10 who set a Christ­mas bud­get bust it by at least £300.

Stick­ing with min­i­mum re­pay­ments will mean your spend­ing mis­takes haunt you for months so com­mit to mak­ing reg­u­lar monthly re­pay­ments.

5. Man­age debt wisely

You can’t pay it off overnight so make sure you’re not spend­ing a for­tune on your bor­row­ing in the in­terim.

Fig­ures show more than one in 10 peo­ple pay for their fes­tive over­spend by dip­ping into their over­draft – which can be an ex­pen­sive way to bor­row.

Switch to the cheap­est pos­si­ble method of bor­row­ing so re­pay­ments are pay­ing debt off rather than ser­vic­ing it.

6. Don’t use credit lim­its as an ex­cuse to keep spend­ing

If you get a new low-in­ter­est loan or credit card, it’s tempt­ing to take ad­van­tage of your full credit limit but this sim­ply means run­ning up more debt. If you’re go­ing to get back on track this year, fight the temp­ta­tion.

7. Build a cash sav­ings safety net Once you have paid off any ex­pen­sive debts, build up three to six months’ worth of ex­penses in an easy-ac­cess sav­ings ac­count for emer­gen­cies.

8. Ditch old sav­ings ac­counts

If you al­ready have sav­ings, check the in­ter­est rate you’re earn­ing and shop around for a bet­ter one.

9. Put fi­nan­cial dates in your cal­en­dar It pays to know when in­sur­ance poli­cies are up for re­newal so you can switch and save.

10. Don’t ne­glect the long-term

It’s im­por­tant to re­visit pen­sions and in­vest­ments once a year, to see if you’re on track.

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