I doubt that there will be many people shedding a tear over the end of 2022. The endless bad news, rising prices and general, all-round grimness really took the edge off what should have been our first full year celebrating after two years locked down indoors.
Believe it or not, there are reasons to remain optimistic about the year ahead. It’s a good time for savers, there is some new help available for people struggling with the cost-of-living crisis and (whisper it) some of my economist colleagues are predicting that inflation rates and energy prices might even peak and start to go down later in the year.
But first, we’ve got to get through January.
Everyone hates January. It’s the longest month if you’re paid monthly, as most people get their wages a week earlier in December to get them through Christmas. That makes it an extra-long wait for payday. It’s also the time when we start to get nervous about the money we’ve actually spent over the last few months.
If things have got a bit out of control, check out my last column on how to face down your finances here.
In the meantime, here’s how to tackle the challenges of the longest month.
Acknowledge the spending
Ignoring bank accounts and credit cards doesn’t make the problem go away. The phenomena of "ostriching" – sticking your head in the sand to avoid financial realities – is very real and perversely, the worse our situations get, the less likely we often to want to acknowledge it.
Here’s a tip. Set a timer on your phone (or cooker) for ten minutes and sit down with your online banking. The first step is to face the truth. Don’t sit in silence, panicking about it. Play some music or leave the telly on, look at what you’ve spent. Then get up, walk away and do something else.
Of course, you still have to deal with the problem! So book some time out in your diary the next day to do that thing. Making a diary booking means committing the time to do something that otherwise you might avoid. Don’t attempt to do this at work either. It’s easy to get distracted and end up stuck on the phone to your bank when you should be in a meeting.
Even the most cautious of us can be taken by surprise by unexpected bills and additional costs over Christmas. You can keep a tight rein on your finances but still get caught out by surprise bills or costs.
In addition, at this time of year, you’re likely to see a notable increase in the number of transactions going through your bank accounts. Take a look and see if there’s anything that you can return or cancel. You have a 14-day period where you can cancel most goods and services bought online without charge so take advantage if it’s not too late.
Oh, and if you had a shopping frenzy using store credit, make sure you’ve factored that into your accounting. It’s easy to forget about ‘buy now, pay later’ deals, so add them to your budgeting spreadsheet or list.
Return it, regift it or sell it on
If you received presents that didn’t work for you, then don’t consign them to the back of the wardrobe.
If you’ve got a gift receipt you may be able to return the goods and get a refund. Many retailers extend their returns policies to late January, instead of the usual 14 to 30 days from purchase. Try not to tamper too much with the packaging though and keep the tags on where possible.
If you are looking to return items that you don’t want then you are the mercy of the retailer’s policies. But these don’t supersede your existing rights. If a gift is broken or not as advertised, then you can return it within 30 days of purchase – though this will need to be arranged through the person who bought it. You’ve also got six months from the point of purchase where the retailer must attempt a repair or replacement for a damaged item – or refund if that doesn’t work or isn’t possible. Did I mention I have a guide to returning gifts in the Mirror?!
How to tackle the overspend
If you’re fighting against a steadily rising fear of dread while looking at your spending over Christmas, the most important thing to do is to stop panicking. Knowing that there’s a problem is the first step to dealing with it.
Give yourself a bit of time to think through the options and have a breather. Appealing to the better nature of retailers can be surprisingly effective – but you need to go in with an agenda and know what you’d be willing to settle for.
If you’ve overspent on yourself or the family, then it’s time to be honest and ask yourselves if you really need the gifts or if it makes more sense to return them.
If you were gifted items and don’t want to reveal you don’t want them, why not use one of the many resale, second-hand or vintage websites to sell them on? In fact, why not have an early spring clean and see what else you have to sell lurking around the house? I’m constantly amazed by what people will buy second hand and the prices that they’ll pay for it. Watch out for scammers though (only sell using methods like PayPal that protect you if you get ripped off).
In addition, many a seller has come a cropper by not following the packaging and postage rules for resale or auction websites, so read them thoroughly and photo the parcel contents before sending them on.
Utilities, regular payments and other bills
It can be a real nightmare contacting big businesses, from energy firms to broadband providers. I don’t have a definitive solution for that immediately (behind the scenes, I’m campaigning hard to improve customer service and introduce minimum service standards). But grit your teeth and persevere – because regulated businesses have to help you if you are struggling financially.
Before you start, you’ll need to prepare a short overview of your finances for the firm. Work out how much money you need to get through comfortably to the next payday and compare it to what you have left. When you speak to the business, explain that you are in financial difficulties, share the details of your finances that they ask for and ask them what proposals they have.
Regulators like Ofcom, Ofgem and the Financial Conduct Authority all have advice on their websites about what you can expect if you are in financial difficulties, so go in armed with their advice.
Whatever you do, don't turn to payday lenders or other forms of short-term credit to get you through January. They are a total false economy, and you'll end up paying more in the long run.
Speak to your bank to see if they can give you a temporary overdraft for a month. If you don't meet their criteria for credit, then take some time to tell them about your situation. If you explain you’re experiencing some difficulties, your bank has an obligation to do what it can to try to help not make the situation worse.
They aren't going to write off anything you've spent, but they can give you a break on charges and interest until you're back on top of things.
If your bank or credit provider refuses to help you, or makes the situation worse, make a complaint to the Financial Ombudsman for free.
Don't ‘let it go'
Christmas cock-ups often occur with businesses. From miscredited transactions to errors with energy bills and other mistakes. You may find that your emergency cover isn't worth the paper it's written on when the weather turns colder. Or your new broadband deal just doesn’t deliver.
Far too 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 that way. Make a formal complaint and take it further if you’re still not happy.
There are loads of free Ombudsman or alternative dispute resolution schemes you can turn to for help with all kinds of business sectors.
Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.
