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How to get your finances in control for 2020

Published on:December 23, 2019Author:Lucyna Rynkiewicz-Jones

Cut back on wasted spending

We all like small treats everyday – mine’s a skinny flat white – £2.60. This amounts to £676 per year or £56 per month. A great start to a 2020 New Year savings plan. This will also cut down on 150 to 70 calories depending on whether this is full or skinny.

Ignore those e-shots advertising New Year Sales

Spending on New Year sales is unlikely to be in your budget and the unplanned spend may have to go on your credit card. It’s likely that you will regret the spend when it comes to repaying the credit. Credit becomes debt when you cannot afford it. See comment below on clearing debt.

Get a handle on your finances

It is tough ask looking at what comes in and what goes out and figuring out where your money is being wasted. Luckily there are apps, such as Money Dashboard, that can connect to all your accounts including current, savings and credit cards. Once your accounts are linked, transactions are automatically grouped and categorized into “electricity, groceries, etc. The apps aim to help you make the most of your money, cut down on waste and help you monitor your medium to longer term goals.

You will feel better taking action even though the task is hard. If you start the New Year with a plan that you are determined to stick to, well done, you are well on the road to making 2020 a positive year.

Put a plan in place to clear your debt.

The average debt that we deal with at The Debt Advisor is around £23,000 which will cost at least £650 to £700 a month in repayments. This level of debt is easily racked up by spending on cards and then consolidating the debts into loans and repeating the sequence a number of times. Serious debt is debilitating and will take it’s toll on your mental health and your relationships.

The first step to set up a debt repayment plan is pulling together an income and expenditure budget. Our debt calculator will help you achieve this. The detailed calculator will help you work out how much spare money you have after covering your household bills and essential personal expenditure, which may then be available to cover your debt payments.

If your debt has become unaffordable and is likely to take years to pay, there are range of debt solutions available. A Debt Management plan allows you to repay your debt in affordable monthly installments. An IVA is a formal solution which again allows you to make affordable monthly payments usually over a 5 year period. IVA’s allow you to write off debt as long as your IVA ends successfully.

If your debt is under £20,000 and your cannot afford more than £50 towards your debt payments and you have little or no assets, a Debt Relief Order “DRO”maybe appropriate and only costs £90 to apply.

Bankruptcy has become easier to access. The application is online and the cost is £680. Bankruptcy could be relevant if you have debts above £20,000 and you have little in the way of assets (excluding your personal and household possessions which are excluded).

All these solutions need careful consideration as they all have risks and benefits. There is free debt advice available which can be accessed via The Money Advice Service.

How can The Debt Advisor help?

We are debt solution provider regulated by The Financial Conduct Authority. Our advisory team are available on 08000851825 and will go through a fact find with you aimed to finding the most appropriate solution.

Finally, on behalf of The Debt Advisor, I would like to wish you success in getting your finances on track for 2020.

Bev Budsworth, Managing Director