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Beat Blue Monday and get out of the red

  • 15 January 2018 has been named as Blue Monday – the gloomiest day of the year. It’s based on a number of factors – including the gap between what we owe and our ability to pay it.
  • If you have borrowed more than you intended at Christmas, it’s the ideal time to take control of your debts.
  • Technically the day has been calculated using a formula based on the time since Christmas, the gap between what we owe and our ability to pay it, the weather, the time since failing at our New Year’s resolutions, our motivation levels and the feeling that we need to take action. Over the years the science has been debunked, but Blue Monday remains a firm fixture in the calendar, because it resonates with us at a gloomy time of year.

    Sarah Coles, Personal Finance Analyst, Hargreaves Lansdown:

    "Millions of Brits will recognise this time of year as the point when they start to feel the pinch. For those who spent a good portion of their December pay bringing their current account to zero, they may be hovering at the cusp of an overdraft. For those who put at least some of their Christmas spending on plastic, meanwhile, it’s also the period when credit card bills start to arrive. Whether we call it ‘Blue Monday’ or the less catchy ‘The day I realised just how much Christmas cost’, the effect is the same."

    "The good news is that if we take action now, this can be as bad as our finances look all year. We can take control of our budget and our debts, pay off the cost of Christmas, and start to build up some savings, so that expensive times of year don’t push us into the red."

    Beat Blue Monday

    1. Stop it growing

    If your debt is amassing interest or charges, it gets more and more difficult to repay, so start by containing the damage. Remember, every pound you save in interest is a pound you can use to improve your situation.

    If you have an overdraft you may be able to switch to a 0% money transfer credit card. If you have a store card or credit card, switch to the cheapest possible deal. You can get balance transfer cards without a fee, offering 0% interest for two years or more.

    Your target is then to repay the debt as quickly as possible – at least within the 0% period. If it’ll take longer than this to repay, consider a personal loan, which is a cheaper way to borrow than an overdraft or the average credit card.

    2. Work on the ‘ability to pay’ side of the equation

    A spending diary is the key here – make a note of everything you spend, and it will help you spot ways to cut back in order to free up cash for debt repayment. You can just use a pen and notebook, or there are plenty of budgeting apps which make it easier to keep your diary up to date.

    Sometimes making cuts is as simple as shopping around for your bills, cancelling direct debts and buying supermarket own-brands. Sometimes bigger sacrifices are required - at least until you get back on top of things.

    In the most serious cases, even after you have used a spending diary and cut your costs, you still can’t see a way to repay the debt. In those instances, it’s important to get help from a debt charity like StepChange or National Debtline who will be able to talk you though the options, and help with things like a debt repayment plan.

    3. Remove temptation

    Don’t rely on having an enormous amount of self-discipline. You don’t necessarily have to do anything as extreme as cutting up your credit cards – although for some people this might be wise. At the very least, if you get a new credit card to manage your debt, make a commitment to resist the temptation to spend on it too. Then set up a direct debit to pay as much as you can afford off your debts every month, so you don’t have to force yourself to do it every month.


    Once you have established these good habits, then as soon as you have paid off your debts, instead of falling back into your old ways, you can direct that monthly sum into building a savings safety net, and saving for next Christmas. If you put the money away into a cash ISA, then Blue Monday next year may be at least a shade lighter.