January presents the perfect time to make any financial resolutions for the year ahead; it symbolises fresh starts, new beginnings, etc. And as many of us are aware, it’s the longest month until payday.
But if you’re tired of setting yourself the same seemingly impossible task of getting your finances in gear, British Association for Counselling and Psychotherapy (BACP) members share thoughts on why this happens and how you can stick to your money resolutions all year round.
For some of us, getting our finances in order may also benefit our relationships, as new statistics from BACP reveal that more than half (55%) of therapists who work with couples saw an increase in money issues or concerns over the past year.
Founder and director of Working Minds, and BACP registered therapist Simon Coombs says: “Christmas and the new year is often a time when we see relationships under strain, or even come to an end, as a focus on finances comes to the fore.
“And with the current cost of living crisis, this will be increasingly evident as couples feel the bite of increased bills to balance alongside what they’ve spent over the Christmas period.”
But Simon says that it doesn’t have to be this way and advises that now is a great time to reset and reframe our thoughts and actions for the year ahead.
Set your 2024 budget
“Setting a budget is important at any point, but it is essential to have one moving into 2024,” says BACP counsellor and psychotherapist Lindsay George. “Online retailers and shops make it all too easy to spend money. Discounts, sales, and offers on items and products we don’t need (or even want) can leave us in large amounts of debt.
“This is especially important during the cost-of-living crisis. As our monthly fuel bills increase, you might consider looking into ways you can reduce your payments, apply for grants you might be entitled to, or save money elsewhere.
“Many budgeting apps are available to download for free on your smartphone or tablet. Also, check with your bank or building society, as most now offer online budgeting tools.”
“Budgeting is important for gifts throughout the year too,” adds Simon. “Whether it’s for birthdays or anniversaries, it’s important to agree on gift limits to spend, but honestly, if he or she has more or less disposable income than you, then keep the limit sensible. Look for meaningful gifts that show you care but are creative and reflect your feelings for your partner.”
Face your fears
“Of course, the best way to manage any type of overspend will always be not to do it in the first place,” continues Simon. “I always see a traditional spike in client inquiries after Christmas as a result of increased anxiety related to debt and not knowing what to do.
“So, if you find yourself in this position, you must not bury your head in the sand. If it is literally too much to manage, organisations like StepChange are there to help.”
Simon advises that if you have overdone your spending, there are “always ways of paying this off incrementally”, but it’s absolutely essential to take action and not wait for a letter through the door or a phone call.
“Take control and make your approach first,” says Simon. “This will help you feel more empowered and less anxious about the situation.”
Speak to your partner
Lindsay George advises that if you have debts that you’re hiding from your partner, as scary as it might feel, telling them about them as soon as you can is the right approach, as leaving things will only make matters worse.
“Struggling with money issues can be stressful and isolating, and trying to deal with the situation on your own can often make stress feel worse,” says Lindsay.
“The sooner you have the conversation, the easier it will be to feel more in control of the situation.”
Lindsay advises you to find a time when you have no plans and no distractions. For example, if you’ve got young children, make sure they’re asleep or out, as this will give you plenty of time to go through all the details.
“Think about what your partner is going to want to know when you tell them,” adds Lindsay. “Get all your paperwork ready so they can see the whole situation – and that you’re taking it seriously. Things your partner might ask you could be: Why are you in debt? What went wrong? How much debt are you in? What are the interest rates? Who do you owe money to? Are you being chased by creditors? What do you plan to do to sort out the debt?
“There’s no point hiding some things; it’s best to get it all over in one conversation, as hiding your debts can also have wider implications and could also impact your partner’s credit rating. For example, if you have a joint bank account, mortgage, or credit card, banks and other lenders might look at the financial situation of both people before deciding.”
Lindsay says you can check if you’re linked financially by accessing your credit report, which is free.
Start a savings plan
“To avoid any overspending in the first place, it’s helpful to try and save a little each month through the year to help with big events like birthdays, holidays, and Christmas,” says Simon.
“Have a grown-up conversation with your partner about what is really important and look forward to the year ahead, which hopefully will involve being happy with each other.
“Look at the things you’d both like to save for, be honest about areas that cause problems, and agree to work together on how to change those things from a negative to a positive. And if need be, arrange a chat with a counsellor who can help you both negotiate any tricky territory; see the BACP directory for help in this area.”
Address your relationship with money
“Many of the values that inform our attitude toward money are shaped when we’re young,” adds BACP registered counsellor Ashley Duncan of Spacious Place Therapy.
Ashley suggests that you “try talking with your partner about how money was handled in each of your families as you grew up.” She also recommends being curious about the way your parents handled and spoke about money.
“Explore what your childhood experiences were with money – for example, what you saved for and what you spent your money on. Talking through your experience of money while growing up may help you understand yourself and each other a little better,” says Ashley.
Dig deeper into your spending habits
For those who struggle with impulse buying or comfort shopping, Ashley suggests: “For a couple of weeks, try making a note of the feelings, thoughts, and experiences that are connected to a desire to overspend.
“Some people find they spend money to meet an emotional or psychological need, so when you look back on your record, you may notice a pattern. Perhaps the urge to shop strikes when you’re feeling stressed and unhappy at work? Or maybe when you’re feeling lonely at the weekend? This insight can help you choose alternative, healthier strategies to meet your needs and deal with difficult feelings.”
“The key is to try to prioritise and cultivate a positive and mindful approach to money,” adds Lindsay, who suggests building smart financial habits such as learning to budget, save, and invest wisely. Lindsay also stresses that it’s important to understand the emotional side of financial decisions and to seek help from a trusted financial advisor.
Be kind to yourself
Therapist Simon Coombs suggests that instead of beating yourself up about your mistakes, use this time to reflect and reset your spending.
“For many people, if we can step back for a moment and reflect on what we have, there is always a chance to change and improve things. Even the smallest steps forward can become greater strides in the future, and there lies hope.
Create healthier habits by imitating others
And finally, Lindsay George suggests that it also helps to surround yourself with others who have good relationships with their finances and to imitate what they do.
“What is it that they do that you can adopt? It may be that they have set up a savings account for incidentals or a Christmas fund they start saving for in January,” says Lindsay.
“Whatever it is, however simple or small, every little positive step that you can take to become more in charge of your spending and financial situation will make you feel more in control of your life overall and help you develop a better relationship with money.
“After all, our emotional well-being is based in part on our financial stability; therefore, it makes perfect sense to create some healthier habits.”