The 2nd February is upon us. The clock ticks around and the radio starts…
“They say we’re young and we don’t know, won’t find out until we grow…”
“Ahhhh! It’s Ground Hog Day again!”
Whilst the good people of Punxsutawney are on tenterhooks over the unconscious prophecies of a 2ft rodent; we ask whether your finances feel like they’re in their own Ground Hog Day?
- Are you in the same place as you were last year (or worse)?
- Do you feel like you’re treading water as you watch the tsunami of financial disaster on the horizon?
- Are you pedalling hard, but can’t see land?
If the answer is yes then stick with us, because we’re going to run through our plan for making 2013 feel a little less like deja vous.
OK, so first things first – you don’t have all the time in the World. You’re not Bill Murray (or at least it’s very unlikely you are). We need to get stuck in straight away and to do this we are going to stick to have a few basic principles distilled from collective wisdom….
- Stop living beyond your means
- Pay of your debts
- Start saving (you never know when Punxsutawney Phil will predict a longer winter!)
…admittedly there’s nothing earth shattering there, but the important thing is your actions. If you want to make progress quickly it will be hard. You have to be tough on yourself – cruel to be kind etc. It’s a bit like running the 100 metres. Yes, you could do it in a minute with very little effort, but if you want to do it in 10 second it will take a hell of lot of effort (especially for those carrying more weight!).
A quick word of warning before we really get going here. If you really are up to your eyeballs in debt and can see no way out, get some help. There are a number of debt and money advice charities out there like Credit Action, The Money Advice Trust and Citizens Advice. Get in touch with one of the them as soon as you can.
Stop living beyond your means!
Ok, so this is easier said than done in January when the Sales tempt us to buy anything and everything, but into February this need to be reined in.
It’s arguably easier to live within your means than it ever has been before. Yes there are more distractions, yes fuel costs are rocketing and wages for all but the riches seem to be going back to the Victorian workhouse, but as the government readily point out, “we’re all in this together”.
Why is this important?
Well, life has been (and always will be) about keeping up with the Jones’ – the difference is that now the Jones’ are now a lot easier to keep up with.
“…the Jones’ are now easier to keep up with”
They’re slowed down as they hand over wodges of coupons and vouchers at the checkout, they’re growing their own vegetables, they cycling to work and make do & mend. Wednesday has become the new Saturday at the Cinema (and it’s not just students filling stalls any more), every restaurant is offering vouchers and discounts and Cashback websites promise ever greater cashback for tons of stuff (some of which we even wanted!).
Basically – It’s easy to live within your means is that frugal is fashionable! Cheap is chic! So pull on your Primark jeans and start to save some cash!
“…frugal is fashionable! Cheap is chic!”
Next you need to CUT, CUT, CUT.
Anything you don’t need must go…
- Can you live without Sky TV
- Do you really need that fancy foreign holiday?
- Could you smoke less?
Everything you do need must be bought at the cheapest price possible…
- Utilities compared online
- Grocery’s should be checked online for the cheapest source(s)
- Lunch prepared the night before and taken to work
Pay of your debts
Good, so you’re no longer spending too much. Now it’s time to pay back previous excess. How you do it depends on where you are terms of current finances, total indebtedness, your financial track record and how savvy you are at comparing and shopping around, but there are a few basic rules…
- Work out what you owe to who (ie. Payday Loan, Credit Cards, Overdraft, Mortgage etc)
- Work out which debt is the most expensive
- Reallocate debt to cheaper sources where possible (or apply for new sources if your credit score permits)
eg. If you have two credit cards, one of which you’re racking up interest on. The other you have £500 credit available at 0% interest. Then consolidate to the cheapest source of funding. - Once you’ve reallocated, start paying off the most expensive debt first. Pay as much as you can as quick as you can. When paying down debts every penny counts
- Oh, and STOP SAVING! Yes, stop. There’s no point earning a poultry 3% on savings if you’re paying twenty odd percentage on a credit card! Use the money to pay off expensive debt.
When you’ve got this far you can almost kiss the spiralling finances and Ground Hog goodbye (assuming kissing rodents is your thing – stop those Richard Gere jokes now), but you’re not done yet.
Now start saving
Wahoo! So you’ve cleared the debt and proved that you can live for less. So what do you do? Go out and celebrate? Spend, spend, spend? Nope. Now we need to save.
The rain is never far away and you need to save for those days. Pretty obvious really, but maybe harder to get the motivation for now you’re not getting final demands in the post every day. One trick is to reward yourself for every amount you save – perhaps a nice meal (with a voucher – obviously) when you’ve saved ÂŁ500 etc.
Keep the motivation up
So there it is. In 500 words we’ve solved all your financial woes. Well no we haven’t. It really is all about the effort you put in, but if you have the flow-through then maybe next year you’ll be welcoming Ground Dog as a marker of the progress you’ve made.
As ever year passes it’s harder for us to claim “…we’re young and we don’t know…” so get with the program and start your Ground Hog Day resolution today.
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Written by :
Mark is the Marketing Director at CompareandSave.com, having previously worked at a number of media agencies on various financial brands. He now splits his time between promoting CompareandSave and investigating new ways to help our readers save money. For press enquiries, please visit our Media Centre page. |
