Managing Your Finances at Christmas

One of the things that used to be an issue for me was sticking my head in the sand when it came to finances.  Particularly at Christmas.  I used to be in debt but at Christmas, at time where I love to splurge on my loved ones, that debt went to the back of my head and I spent what I wanted..

I know that this is something that many of us do, especially in the holiday season.  When January rolls round, our head comes out of the sand and we realise yet again that we have overspent and gotten further into debt.

This happened to me.  It happens to many people.  It took me seven years to sort out my finance problems and along the way I have learned many lessons, a couple of which I will share with you.

Please note that I am not a financial expert, nor am I qualified to give financial advice.  I am writing this blog today because people do not talk about being in debt.  We gloss over the subject, we hide the problems in shame.  I was that person. In debt more than I could handle, through my own fault.

The first tip.  Do not panic.

When I (finally) took my head out of the sand I had no clue what to do, and went for the first option available which is hindsight, was the wrong thing to do. I panicked and ended up paying out far more as a result.

Once you have realised the extent of your money problems, you need to look at the different options available to you in order to resolve them.  

One of the most stupid things I did over one Christmas period was to hit the payday loans.  What I didn't think about was the huge interest rates involved and how far it can escalate.  If you get into this kind of mess what you can do is look at a payday loan consolidation company.  They look at your budget, sort out with you what you can afford and deal directly with your creditors.  Sometimes, as I found, it can all be too much so someone dealing directly with your creditors can be a huge weight off your shoulders.

Another option is a debt management plan.  

My error was that I did not research debt management plan providers and just went with the first one I found.  This ended up costing me over two thousand pounds by the end in admin charges.  

What I know now is that there are free debt management plan provides which do exactly the same job.  They work out what you can afford, negotiate with your creditors and work out a plan for you to pay off your debts, often with the interest frozen.

I would suggest contacting the Citizen's Advice Bureau who have loads of advice on the subject and the link I have put in goes directly to the free providers of debt management plans. 

If you owe more than ten thousand pounds, you could go into an IVA (Individual Voluntary Agreement).  You can get free advice on this from the Money Advice Service.  This enables you to get around 70-80% of your debts written off, and the remainder is handled by an insolvency practitioner (you will pay for this service).

I hope this helps a little for anyone reading through who has only just pulled their head out of the sand and is, as I was seven years ago, in a blind panic.  Don't panic.  Research.  Make use of the free resources available.  

You will get through this.  I did and so can you.

*Collaborative Piece