Don’t wait until after Christmas to give those finances a make-over

by Matt Burns.

Around about this time of year, it’s always tempting to just think “Ahh…I’ll sort it out in the new year”. But here’s why that could be one decision which ends up costing you more than you might bargain for…

First things first, grab yourself a nice cup of coffee, and get yourself comfy. If there is one thing all of our regular U-credit readers should happily testify to by now, it’s that nothing is ever simple or straight forward when it comes to the thrilling world of finances. Yes it’s complicated, and yes it’s boring. But take our advice, and stop putting it off any longer – you won’t thank yourself for it in the long run. The sooner you sit down and work out a plan, the sooner you can get on with your life and enjoy the liberating feeling of being debt free.

Sure, it’ll wait until after Christmas, but why would you want it to? Any time you waste now while you procrastinate from sorting the problem out, will only serve to prolong the amount of time you spend in debt, and, let’s face it, under stress! It’s far better to take action now than to put things off until the New Year. Ever heard the saying “don’t put off until tomorrow that which can be done today”?

Prioritise your creditors

You need to take the time to sit down and go through everything properly. Make a list of your current debts, how much you owe on each account, who you owe it to, and what the interest rate is on each item of outstanding debt that you currently have.

The next step – and this is the important one – is to look at those interest rates in a bit more detail. You need to be prioritising the highest interest rate borrowings as the ones which you will pay off first of all. This is something that a lot of people fail to do, and it is without doubt one of the main pitfalls of effective financial management.

Think about it like this…let’s say for example that you have a spare £100 this month, and you make the wise decision to put that £100 towards paying off some of those Christmas debts that have no doubt already begun to manifest themselves. What most people would do at this point is simply make out a cheque for an extra £100 to the next bill that happens to come through the door. But here on U-credit, we like to think we’re ever so slightly more switched on than that. You see, by leaving it purely down to luck as to which account you put our spare money towards, you are not really taking as much control over your finances as you could be. There is a much smarter way to do things, and we’re going to take you through how you should be doing it – think of this article as a little bit of an early Christmas present!

Our number one piece of advice this Christmas is to prioritise your existing debts. Now, we don’t mean paying off the lowest or highest ones first – in actual fact, the level of debt to each company is kind of irrelevant at this stage in the game. What you are trying to do is to cut down the amount of money that you are going to have to pay out between now and the time that you are completely debt free and all of your accounts are paid off. The only factors that really have any effect on the amount of money you will end up paying out in total is the interest rates that each of them charge, and the length of time you take to pay off the total owing. For this reason, you need to make sure that you prioritise those debts with the highest interest rates, and make paying those off first your number one concern. The longer those high interest debts drag on for, the greater the total sum of money that you end up having to pay.

This is just one more reason why you should avoid putting off the financial sort out any longer. Don’t wait until after Christmas to get on top of things and start to get your life back on track. It could end up costing you an awful lot more than you had originally bargained for.

If you’re struggling to get to grips with your debts, and you don’t know where to begin, be sure to spend some time having a browse around the U-credit site. We are committed to bringing you the very best in up to date, accurate and highly informative advice to help you take back control of your accounts. The only thing stopping you from improving your financial situation as of right now, is you. So stop putting off until tomorrow that which can be done today – be strict with yourself, and take the action that you need to take to improve the lives of yourself and your family today.

Don’t spread yourself too thin

One other point to remember is this – focus on one thing at a time. What do we mean by that exactly? Well, it’s pretty simple really…what we are saying here is don’t try to spread yourself too thin when it comes to paying off the variety of debts that every single one of us have almost certainly accumulated in the run up to the festive season.

There can sometimes be a temptation to look at all of your spare money each month, and simply divide it between the number of people you owe money to. This is not the best way to do things, and this technique can actually end up costing you much, much more money in the long term, even though you may think that you are doing the best thing you can.

Always remember, as we have already stated above, the key is to prioritise your debts according to interest rate, and make sure that you are doing everything you possibly can to pay off the highest interest loans and borrowings first of all. This means that you should stop paying anything more than the bare minimum on all of your other borrowings, and focus every penny of spare cash that you can muster onto the single highest interest debt that you have. By only paying the very minimum off on all of the other debts, you are managing your money and ensuring that you are channelling it towards the most expensive debt. This can drastically reduce the amount that these debts cost you over the course of a year or more. This approach also brings with it the added bonus of reducing the number of people that you owe money to as quickly as possible. If you pump all of your spare cash into one single outlet rather than spreading all of your money out of numerous sources, then you will pay that one creditor off a lot quicker. And trust us; there really is no better feeling than being able to cross one more person or company off of the list of people who you owe money to. Here at U-credit we have found that this is actually one of the main moral boosters you can have, and is a great motivator to continue down the road towards a brighter financial future.

Stop putting it off, and quit quitting

If the pressure and stress of money is starting to cause you a headache in the run up to Christmas, then what better reason to sit down and take a cold hard look at your finances sooner rather than later? The sooner you take charge of your money and start to take steps towards improving your financial future, the less chance there is of you being in this very same situation when next Christmas comes around.

How many times now have you made a New Year’s resolution? And how many times have you actually stuck to it? Be honest with yourself, because we’d be willing to bet there is quite a difference between these 2 numbers. We have talked a lot here today about why you shouldn’t wait until after Christmas to asses and sort out your current financial situation. But this has to be the ultimate reason as far as we’re concerned.

As we said at the very beginning of this article, almost everyone we seem to speak to around this time of year is constantly telling us that they are planning to try and get on top of their finances in the New Year, just as soon as Christmas and the holiday season are out of the way. But as with any  New Year’s resolution, what starts out with all good intentions, seldom remains so.

So don’t wait until New Years to make a resolution to yourself to do something, when you can quite easily stand up and take that action today. Trust us – you will feel a lot better for it when you are debt free that little bit earlier.