JANUARY can feel like a real drag after Christmas and New Year – not only is it cold and dark but with many of us being paid earlier in December, our wallets are feeling the strain.
If you’re struggling to make it until payday there are things you can do to get through the rest of the month without reaching for an expensive loan or dipping into an overdraft.
Read our handy guide for expert tips on how to make your money stretch into February.
Work out how much money you have left until payday
When money is tight it can be really tempting to put our fingers in our ears and hope for the best – but the best thing you can do is work out exactly how much you have left and make a budget.
Take a close look at your bank accounts, inside your wallet, and even down the back of the sofa. If you have a coin jar or a rainy day fund, count that up too.
Once you’ve worked out how much money you have Citizens Advice recommends making a list of how much money you need to keep aside for essential living costs like food.
You can then make another list of the money you owe for things including bills, and work out how much you can afford to pay back before payday.
The charity has a free online budget planner you can use here.
Make sure you get all the money you are entitled to
If you’re a low income household then you might be entitled to benefits and discounts on things like bills.
It’s worth checking to make sure you are being paid all the money and help you are entitled to.
Citizens Advice can help you to work out what benefits you are eligible for over the phone. Or you can visit entitledto.co.uk to search what you might be missing out on.
The key is you being proactive and not burying your head in the sand
There are also government-funded grants you might be able to apply for that help reduce your energy bills.
You might be able to bag yourself a new boiler, free insulation, or even a discount on your heating bills if you're on a low income.
Martin Lewis at Money Saving Expert has a helpful up-to-date guide of where to look.
Work out which bills need to be paid first
Once you have worked out what bills you owe it is important to work out which ones need to be prioritised – especially if you don’t have enough money to pay them all at once.
Skipping on some bills could negatively affect your credit score and could mean you rack up penalty charges.
Generally speaking your rent or mortgage, energy and council tax bills are known as “priority debts” and should be paid first.
But it is also important to keep up payments on your phone bill, TV and any subscriptions you pay.
If you don’t have enough money to cover all of your bills the best thing you can do is seek expert advice.
The Money Advice Service, Citizens Advice and for, those who are debt, the charity Step Change all offer free expert advice over the phone.
Their experts can help you find out what to do next. If you can’t pay then this might include recommending you call up your suppliers to work out a solution.
How to get free debt advice
GETTING free debt advice is quick and easy.
If you are in debt and worried about how to deal with it there is lots of free help available.
Get in touch with one of these organisations for free advice on the phone and online
- Money Advice Service
- Step Change
- Citizens Advice
Ask your suppliers for help
Most companies will want to help you find a solution and might even give you a payment holiday or a payment plan so that you can afford to keep up with your payments.
“The key is you being proactive and not burying your head in the sand,” Gareth Shaw, a money expert at consumer champion Which? says.
“Many providers have dedicated teams set up to help people in financial distress who can’t make the entire payment but they won't do that unless you go and talk to them proactively.
“What they might say is you can make a part payment for this month and spread the rest of the bill throughout the year.”
And although it might all sound a bit “scary”, he says, you might be surprised by how much some companies will be willing to help you.
“They want money coming in insure you don’t disappear off and make no payments at all – so they will find a way to make it work,” he says.
Shop around for better deals
Another way to save money in the long term is to shop around for a better deal on your bills.
“Loyalty doesn’t pay – and if you’ve been with the same company for years you’re probably paying over the odds – and that’s everything from broadband and energy to car and home insurance,” Gareth Shaw says.
Check out sites like Money Saving Expert for top deals and search comparison sites like Money Supermarket to find out if you could save.
If you find a better deal, take it to your supplier and see if they will match it. If not, switch to a better supplier when your contract ends.
Cut back on unnecessary expenses
Even when we think we’re being frugal it can be easy to splurge cash on things we don’t really need.
Many people pay hefty bills for subscriptions that they don’t need – like for Netflix, Amazon Prime and Spotify.
If you don’t use them enough to justify the expense, cancelling them will give you some extra cash in your pocket.
You can also save money on your food bill by swapping favourite brands for supermarket own label versions or by cooking ahead for the week in bulk and freezing it, like this savvy mum did.
How to switch your energy bills
WHEN it comes to sticking with the same supplier for years loyalty doesn't pay.
Switching your phone, gas, electricity or insurance provider can feel like a real faff, but it might save you hundreds in the long term
Millions of households have never switched – and they are paying through the nose for their household bills as a result
To get a better deal you need to shop around on price comparison sites like uSwitch, Citizen Advice and energyhelpline.com to see what's out there
Make a note of the best deals and then call your supplier and ask them if they can match the best deal
Remember to be polite – the best way to get what you want is to charm the call handler
If the supplier won't improve your deal then be prepared to walk away – but you must check your terms and conditions to see when you can leave the contract
Some companies will charge a fee for ending your contract early, so make sure you'll be saving more overall if you do leave before the end
Earn extra cash on the side
Who wouldn’t want to earn some extra easy cash on the side?
There are lots of ways you can make more money to help you stretch the pennies to payday.
Many people like to declutter their homes in the New Year.
But before you head to the dump or give it away to the charity shop it might be worth seeing if you can make some money from your unwanted stuff by selling it at a car boot sale or online.
Facebook Marketplace is an easy way to sell stuff in your local area for free.
You just list the item and the price and if someone wants to buy it they collect it from you and pay cash.
There are also lots of buying and selling groups on Facebook so it’s worth searching online to see if there’s one you can join in your local area.
You can also list items on Gumtree and an Ebay – though Ebay will take a cut of the selling price.
If you have the time to take up some extra work you can turn to a temporary employment agency in your local area or search one of the major sites like Indeed or Reed for work that will pay by the hour.
If this means you’ll earn enough money to boost your income over the tax-free allowance of £12,500 this year then bear in mind that you will need to declare it to HMRC and pay tax on it.
If you need to borrow, borrow wisely
The cheapest way to borrow if you really need it is to get an interest loan from family and friends.
If you're in need don't be afraid to ask – it could really help you out and prevent you from getting into debt with a bank or lender.
But just bear in mind that anything you borrow will need to be paid back and you'll need to shake your budget up to make sure you can.
If you can't borrow from loved ones then search online for the best interest rates on loans from banks and credit unions.
You can compare these on sites like Money Supermarket.
Remember that applying for a loan can leave an impact on your credit rating, though, so do your research first.
For those who can't get a traditional loan there are short term lenders out there – but remember, they can charge extortionate fees that could put you in a worse situation than you started out with, so approach with caution.
You can also speak to your bank about getting an overdraft – but beware that many lenders have hiked up their fees and interest rates.
Whatever you borrow, be sure to create a budget for paying it back before you take the plunge.
If you want to save money on your food bill then why not batch cook for the week ahead like this savvy mum, who saves £100 a month.
Millions of struggling Brits may be able to get extra help by claiming benefits they didn't know they were entitled to – check out if you could are one of them in our handy guide.
Some hard up parents may also be eligible for help with buying school uniforms, with struggling families in England able to get help from local authorities. Find out what yours can do for you.
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