Today is meant to be the most depressing day of the year, but it needn’t be. Catherine Winter shares four financial New Year’s resolutions to help you plan your finances for 2020.
The idea of ‘Blue Monday’ was coined in 2004 by psychologist Cliff Arnall, as part of a Sky Travel winter promotion campaign.
The most depressing day of the year usually falls on the third Monday of January. The weather is dreary, all the holiday season excitement is over, and finances are tight.
But today is also a good time to reflect on things you want to change. New Year’s resolutions don’t have to start at the beginning of the year, they can be goals which you implement over time – such as managing your money more efficiently.
Be sale savvy
One of the not so blue things about January is the many, many sales.
However, it’s easy to get caught up in all the discounts and bargains and splurge more than you need to. Most of us have been guilty of buying something that we don’t necessarily need – or maybe even want – just because it’s on offer. So before buying something, ask yourself whether you need it?
And if something you want sells out quickly, don’t buy a lower quality product just because it’s been discounted.
Whatever you do, don’t forget the most important tip for shopping in the sales – if it wouldn’t catch your eye at full price, it’s not worth buying.
Boost your credit score
I wouldn’t encourage racking up debt but using a credit card for your purchases might have some benefits – especially if you pay your balance in full each month.
Some providers offer cashback incentives – airline miles and other types of rewards. So buying items with your card could be a great way of building those reward points while still saving money.
Compared to other forms of payment, one of the best things about using a credit card is that most providers offer purchase protection. And some offer an extended manufacturer warranty, keeping your product insured for longer.
This means that if something you buy gets damaged or stolen even after the store refund date, you could put in a claim and get your money back through your card provider.
Before making a purchase, check with your provider to see what perks and protection they offer.
In the January sales, only use your credit card for items if you can pay your bill in full and on time. Or, for bigger purchases, think about getting a 0% card.
That way, you can avoid interest rates – and the potential debt that follows – and continue to boost your credit score.
Stick to a budget
Whether it’s the weekly food shop or you want to treat yourself, work out how much can afford to spend.
If budgeting is something you dread, there are plenty of free tools to help you get started. The Money Advice Service has a free budget planner tool which can analyse your finances and also offers personalised tips on how you can save money.
If you’re hitting the sales, then make a list of the things you want to buy. Having a list removes the temptation to impulse buy!
Research before buying
Doing your research before you start shopping will help you stay within budget.
Think about logistics. For example, in the sales, is it cheaper to buy something in store or online? While buying in store could help you dodge delivery charges, some deals are exclusive to online products.
If you do choose to shop from the comfort of your own home, sites like My Voucher Codes offer money-off vouchers for when you spend a specific amount on certain sites.
Price comparison apps and websites are also a great way to check which items you could save money on.
Sites like PriceSpy show where you can find good deals on homeware, technology, clothing and more. PriceSpy also allows you to create pricing alerts on products you’re interested in, keeping you well informed throughout the January sales!
Catherine Winter is Managing Director of Financial Capability at The London Institute of Banking & Finance, which provides financial qualifications for all ages.
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