Blue Monday is coming up and so named because December’s pay cheque is often paid a day or two earlier and then January is a five week month, with many of us not seeing another pay cheque reach our bank account for another couple of weeks.
When we worked out which day was Blue Monday we felt it fell on January 26. But the growing concensus is that it will actually fall on Monday, January 19. Sheeesh! You wouldn’t think people would be so keen to get there sooner, would yah?
Why so blue, Monday?
Credit card bills have landed and maybe your overdraft limit is being challenged. It’s cold and your heating is on at full pelt, causing anxiety about the cost of the units being used. And while wholesale energy prices apparently tumbled in the run up to Christmas, none of the utility companies have reduced their standard tariffs, so big bills will be on their way.
At the time of writing only one of the big energy companies has cut its standard gas tariff and then by a just 3.5%. A forthcoming government investigation into to why energy providers are sitting on their hands is widely rumoured.
Talk to your energy provider. See if you’re on the best tarriff currently. If you need to sign up for a fixed period to get the best energy deals find out if there’s a penalty to get out of the fix if and when a better deal comes along. Some companies don’t charge. Penalty fees themselves can be as little as £20 or £30. The time to find out what they are is when you go in.
If you have big credit card balances now is the time to do something about it. First of all make sure that you don’t miss a payment. Either set up a direct debit or put a note on your mobile or in your calendar (a few days before the payment is due, so you allow time for funds to clear). A missed payment will incur penalties and the monthly interest as well.
If your credit rating is reasonable you might be able to get a zero interest credit card and transfer the debt over, for the payment of a fee. The fee can be around the price of one month’s interest, or can be much more. SO CHECK BEFORE YOU TRANSFER! If you transfer, you will have six, 12 or more months (however long the interest free period is) to pay the whole bill off. But you must not use the card to buy anything new. The card companies offer these cards because they know the vast majority of users start spending and incur high interest costs on the new debts.
If your card payment due date is shortly before you are paid you could also incur bank charges each month. It’s worth applying to move the payment date to after your pay date. Most companies will agree and it should help you to avoid penalty charges in the future.
Slow and steady
Steadily tackle your regular bills – energy, phone/broadband, food shopping… We don’t expect you to review them all in January, but if you review what you’re paying on one or two regular items each month, by next January should have a totally different money vibe and have saved hundreds of pounds.
More dates for your diary
Put the dates of your all your insurance policy renewals in your calendar along with a note to shop around at least two weeks before the renewal date. You can then check out the market for alternative policies in good time and move if you find options that are cheaper. You can also challenge your current company to match the new rate. Insurance companies offer new customers discounts of around 20% and maybe more for online customers. If you call them out on this they will sometimes give these rates to existing customers rather than lose them.
If you have a mortgage rates are still low and fixed rates are very attractive. The consensus is that interest rates will not rise this side of the election and maybe not at all in 2015. This means that two year fixes are cheap and five year fixes are not much more. If the increase in the value of your home means that you have 40% equity you will be eligible for one of the cheaper fixed rate loans. If you cut your mortgage rate there is nothing to stop you still paying your current monthly payments and cutting the length of the mortgage.
Some of the mental tools you can use to overcome feeling financially blue….
If you feel less blue then managing those pesky debts seems more doable. Up your physical energy levels and you’ll feel more like tackling your finances.
So as well as the practical tips above, try the following…
1. Get out and about (no, not pubs and restaurants, but the park ,or dust off that gym membership you’re paying for anyway). Brisk exercise will improve your mood and release feel-good chemicals in the brain.
2. Talk to people – outside the house, on the bus, in the park… isolation contributes to feelings of depression. This is particularly important in January when we go in for less socialising generally because it involves spending money.
3. Get plenty of sleep. If you do work on your finances in the evening, make sure you stop some time before bedtime and do something more fun. Worry tends to play havoc with our sleep cycles and it becomes a viscious circle.
4. Eat healthily but often and well. Starving ourselves in a desperate attempt to shed the winter pounds also messes with our body’s chemical balance. Eat regularly. Avoid sugar and instead eat feel-good foods such as green veg, beetroot and a little bit of good quality, high cocoa solids chocolate (see, it ain’t all bad news). A cube a day should do it.