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How to dig your way out of debt in 2020

Got that feeling of dread after over-spending? Vicky Shaw reveals how to get back on track

Counting the cost: many people will seek to save money this year
Counting the cost: many people will seek to save money this year
Counting the cost: many people will seek to save money this year

By Vicky Shaw

With Christmas and the New Year celebrations now over for another year, many people are experiencing a sinking feeling. That awful moment where you know you can't put off looking at your bank or credit card statement.

The due dates on your regular payments - or the bills landing for those items you bought on credit online.

Tempting as it is to stick your head in the sand, the sooner you seize control of your finances, the better.

Here, Martyn James, spokesman for, offers some tips to get yourself back on track for 2020...

Look at what's left over

January is a long month. Many of us were paid a week earlier than usual as a Christmas perk from employers - but it's easy to forget this money needs to stretch over five weeks to the next payday. The knock-on effect can also impact on the next few months, as people borrow to offset money they've already spent.

Before you tackle your spending, look at how much cash you've got left over. Check your direct debits and standing orders, so you know what else is due to come out of your account.

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Lots of us also have regular payments for subscriptions, streaming sites and other outgoings.

Ask your bank for a statement from January last year - so you can see if there are any annual payments due that you might have forgotten about.

Be honest about your spending

Don't be in denial about the cost of Christmas. If you've got spending regrets, see if there's anything that you can return or cancel.

Consumers have a 14-day cooling off period, where they can cancel goods and services bought online without charge - so you might want to see if you can take advantage if it's not too late.

Don't panic if you've overspent

If you're in the red, or you've spent more than you thought, don't panic. Knowing that there's a problem is the first step to dealing with it. Give yourself time to sort the situation out. Work out how much money you need to get through comfortably to the next payday (left), and compare it with what you have left. It may be tempting to use high-cost short-term credit, such as a payday loan - but this could cost a lot in the long-run.

You could try speaking to your bank to see if they can give you a temporary overdraft for a month - some banks offer customers a small interest-free overdraft "buffer".

If you don't meet your bank's criteria for credit, tell them about your situation. If you explain you're having difficulties, your bank should do what it can to try to help, not make the situation worse. Those in serious debt could also try contacting businesses they make regular payments to and asking them if they'll accept a lower payment for a short while, or spread the outstanding debt over future payments.

It's also a good idea to make sure you're not duplicating payments - such as paying old insurance premiums which provide similar cover to newer ones. If you're accidentally paying for the same service with two businesses, try asking for a refund.

Remember if you don't ask, you don't get

People often contact Resolver to say that they've got into difficulties, because they felt responsible and didn't think anyone would help.

From time to time, people from various walks of life can find themselves struggling to make ends meet - even those who are "asset rich" (where you have a home and job but aren't earning enough to pay for it all).

If you speak up early, before you start missing payments, you've got more chance of preserving your credit rating, while finding a solution to get you back on top of your finances.

Don't 'let it go'

Christmas mistakes often occur with businesses - from wrongly credited transactions to errors with energy bills. You may find that your boiler plan isn't worth the paper it's written on when the weather turns and it packs in, or that tablet you've bought for a loved one doesn't work at all. Many people give up on making a complaint because the process can feel frustrating or seems like too much work.

It doesn't have to be

Resolver can help you sort out complaints - whether they're yours or those of a friend or relative - for free.

Help is also available from charities such as StepChange and Citizens Advice. And the Financial Ombudsman Service can help with complaints about financial firms.


Looking for some financial inspiration for 2020? Here are some tips from Laura Suter, personal finance analyst at investment platform AJ Bell...

1 Start a "money club" with friends that focuses on any aspect of money, so a savings club, an investing club, or a paying-down-debt club. Firstly, it will start you talking about money. But also, much like weight loss or pregnancy groups, having the support of people in the same situation will help you to learn tips to achieve your goals - as well as holding you accountable.

2 Tackle a bill a month. Pick one bill each month and cut the cost. The simplest way could involve calling your current provider and asking what their best rate is - this is "low hassle" and often results in a saving. It can also help if you can point out what a competitor is offering.

3 Build an emergency fund. Lots of people will struggle if they have an unexpected cost. But if you squirrel away a little bit of money each week or month it can add up - even by starting with a small amount. You can also use rounding-up services offered by many banks, where they round up your purchases to the nearest pound and save the difference.

4 Have "no spend" days. Try to have at least one "no spend" day a week - or more if you can manage it. By avoiding spending any money on one day it will make you more aware of the money you spend on other days - and highlight where you're spending without thinking.

5 Tackle your pension. Make sure you know who your provider is, how much you're paying and what that money is invested in. You could also use online calculators to look at how much your pot is likely to grow to by the time you retire.

6 Start saving for children. Putting away just £100 a year every year since a child was born can add up to £3,000 when they turn 18, assuming it's invested and gets 5% a year growth after fees. Putting away £50 a month could equal more than £18,000 by the time they turn 18. The value of investments can go down as well as up.


Financial fact: Christmas shoppers withdrew £572m in total from ATMs on Friday December 20, 2019 - making it the busiest day of last year, according to cash machine network Link.


Across the UK, the average amount saved in 2019 was £2,061, up from £1,798 in 2018, a survey of more than 4,000 people from specialist bank Aldermore found.

Ewan Edwards, head of savings at Aldermore, said: "It is encouraging to see people are increasingly focused on getting into the positive habit of saving. Making little changes to spending and saving routines can be very rewarding in helping realise people's short and long term money goals.


People giving up alcohol during dry January and beyond could save enough money to splash out on far-flung holidays, according to research. Even a short five-week no drinking stint could result in a couple saving enough cash for a two-night stay in Amsterdam, a study for foreign exchange firm Caxton found.

Giving up booze for a whole year could save enough for a week-long all-inclusive stay in Montego Bay, Jamaica, come this time next year, the research, carried out for Caxton by website, found.


Rents have increased nearly twice as fast over the past year as they did in 2018, according to an index. Across Britain, the average cost of a private rental home increased 2.1% year-on-year in November 2019, nearly double the 1.1% increase seen in November 2018, Hamptons International said. The average rent of a newly let home in November 2019 was £989 per month - around £20 more a month compared with a year earlier.

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