Christmas is a time for joy and celebration, but without some financial discipline, it can also be a time for overspending and debt. The good news is, the new year is a great chance to reflect on your financial decisions from the past 12 months and break bad habits.
Whether you dipped into your savings or didn’t save at all, it’s not too late to change your money mindset and enter 2025 financially strong. With that in mind, here’s our pick of the five bad habits you should leave behind for a happier and healthier start to the year:
1. Relying on credit cards
The convenience of credit cards makes them an easy to pay for things that would otherwise be out of reach – especially at this time of year when you have a seemingly endless shopping list and money is tight enough as it is. But this habit can quickly lead to a financial hangover come the new year when you’re slapped with a hefty credit card bill that you can’t afford.
To avoid credit card debt, set strict spending limits and only use credit cards for purchases you know you’ll be able to afford at the end of the month. This can help you avoid racking up extra interest and fees – which can end up being more than the amount originally borrowed in the first place!
2. Spending impulsively
This time of year is synonymous with spending. But while it’s no secret that we all splurge a bit more during the festive season, there’s a difference between buying things you want and things you can happily live without. Before hitting the shops, make a list and stick to it.
Unsubscribing from marketing emails can also help you resist the temptation to make an unplanned purchase. There’s nothing wrong with treating yourself from time to time, but setting limits can help you know when to stop.
3. Ignoring your debt
Being in debt can be stressful and it can be tempting to just bury your head in the sand and hope it all goes away. But ignoring the problem will only make it worse when you eventually decide to deal with it and you could be subject to extra penalties and fees – especially if you’re being chased by debt collectors or bailiffs.
Remember, just because you’ve decided to ignore your debt over the festive season, it doesn’t mean your creditors will stop pursuing you for the money owed. Whether you’ve missed a payment or you’re in arrears, dealing with your debt now can help you start the new year on solid financial footing.
4. Not having an emergency fund
The cost of living has made it difficult to save, but there are still several things you can do to ensure you’re prepared for a financial emergency. From a home repair to a job loss, all it takes is one unexpected expense to plunge you into debt.
No matter your circumstances, every little helps. Even if you can only afford to save a few pounds every month, you could end the year with a substantial nest egg. Alternatively, try cutting back on non-essential spending and shopping around for cheaper deals to free up some extra money so you can be prepared for the unexpected.
5. Learn to live with less
Whether you’re a serial spender or just want to be a bit more frugal with your finances, learning to live with less can help you save some serious cash. But living with less doesn’t have to mean giving everything up. Eliminating just one non-essential expense from your budget each month can lead to huge savings in the long run.
Decluttering your home can also help you enter the new year with a clean slate and get into the habit of living minimally. Online marketplaces can be a great place to sell items you no longer want or need and there’s no shortage of charities in need of clothes, shoes, and toys – especially at this time of year.
The festive period can be stressful if you’re already struggling with your finances, but you don’t need to suffer in silence. Whether you’re being visited by bailiffs or just need some free advice, there is always help available. Get in touch today to find out how Carrington Dean can help.
