How to survive the January finance slump

January is well known to be the most difficult month in terms of personal finance. Your bank balance is likely to have taken a major hit from Christmas and all that extra socialising over the festive period, and your next payday can seem a long way away. Here are some top tips for dealing with the dreaded January slump.

How to deal with the January slump

Step one: Plan your budget carefully

If you want to stretch your money until payday, you have to start with a careful plan. Calculate how many days you have until your next payday and consider what necessary expenses you will have until then - for example, bills, rent or mortgage payments and food. Also identify exactly how much you have to spend, and include any income you might have until this period. You should now know how exactly much money you need to get you through until February.

Step two: Cut out unnecessary expenses

A moderate amount of penny-pinching may be required to keep you in the black. Use January as a month to recoup (financially and physically) from all the excess of the Christmas period. Skip take aways, a few nights out, shopping trips etc. and the savings will soon help to plug any holes in your finances. Your budget should also tell you how much (if any) money you have left over to spend on "wants".

Step three: Use credit the smart way

Few people actually consider that paying interest on your credit card is entirely optional. Pay your balance off during the interest free period (usually one month) and you won't incur any additional expenses. This could be just what you need to get you through to pay day.

Step four: Start as you mean to go on

Although New Year's resolutions usually don't last into February, you can use the January finance slump as a motivator to establish good spending and saving habits this year. That way, come next January, you won't have to deal with another slump!

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