With the festive season over, many Britons will be looking at their bank balances and wondering if they may have gone a little overboard this year. The temptation to go large for Christmas and New Year’s can be a bit too much for some, and people often find themselves taking out short term loans or putting debts on to credit cards in order to facilitate their spending.
However, with the holiday period now over, people are finding that they need to repay those debts and they come crashing back to Earth when hit with this dose of reality. This is when many consumers cut back their spending and debt companies notice them making more sensible choices.
The first thing many borrowers look to do in the New Year is ensure they are getting the best rates on their repayments. Whether that is moving from one credit card to another, changing which energy company you bill with to get a better tariff or even looking at remortgaging, people become quite savvy about their debt.
Then come the payback plans. By creating a realistic budget, families can ensure that they will be able to meet their financial commitments. This is also when some people will realise that they are pushing their balance a bit too hard and may need to cut back on some non-essentials.
Finally, once the immediate debt is taken care of, many people will look at what they have left over each month and wonder if there is something more sensible to do with it. Although this can be a difficult stage for many people and the temptation to spend is there, it’s worth remembering that a savings account could help you avoid this situation next year. Now is a good time to start too, as you can start depositing into an ISA and then have the limit renewed come April.