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According to Money Advice Trust (MAT), an estimated 7.9 million people expect to fall behind with bills in January, an increase of 11% on last year.

Five steps to deal with your New Year financial hangover

We all like to enjoy the festive period and this often involves overindulging on food, drink and even our money. But the new year can also bring unwanted financial problems as festive overspending catches up with you.

According to Money Advice Trust (MAT), an estimated 7.9 million people expect to fall behind with bills in January, an increase of 11% on last year.

The key problem, despite our best intentions, seems to be we just don’t plan well enough in advance.

More than half of people had not saved up for Christmas at all before December and more than one in three put Christmas on the credit card.

So, what can you do now to stay on top of your bills and how can you prepare for Christmas this year to avoid the same thing happening in 2019?

Make a budget

Start 2018 off on the right foot by getting around to making a budget.

It’s not glamourous, but it really is the best way to understand your spending habits, find areas to cut back and stay out of debt.

Total up everything you have coming in from work, benefits and other sources. Then look at everything going out including utility bills, rent, mortgage, travel and mobile phone.

This will give you a good idea about how much you have left each month and might also highlight some areas you can cut back.

Seek advice

If you’re already struggling with debt, or are worried about the post-Christmas credit card bill, then it is vital you seek advice as soon as possible.

You might think you have your money under control, even if you do find yourself overstretched at the end of the month. But dealing with your debts head-on at an early stage makes it an easier problem to solve.

Start planning

Nobody wants to start thinking about Christmas again, but planning ahead really is the best way.

If you were to put away just £50 a month from now until December, you would have £600 tucked away to help cover the cost of Christmas.

This might not pay for everything, but it will be enough of a buffer to mean you won’t need to reach for credit cards to pay for the festivities.

Join a credit union

If you’re starting to save for Christmas 2018, then you’ll also need to think about where you’re going to put the money.

Now, you could just keep it in your regular bank account. There is nothing wrong with this, but it does mean you might be tempted to dip into it early.

A good alternative to this is to join your local credit union and set up a Christmas savings account. Many credit unions offer special Christmas savings accounts, so you can be sure your money is safe until you need it.

Credit unions also offer a range of other services, including low cost credit, which could help you if you have to deal with an unexpected expense. 

Other ways to save for Christmas

Credit unions are not the only way to get savings for Christmas. You can just as easily pay money into a bank or building society savings account, or even a Cash ISA.

There are also clubs and supermarket savings schemes you can take advantage of, which can help you cover the cost of Christmas. 

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