How To Avoid These 6 Common Money Mistakes in January
Written by
Vance Cariaga
Edited by
Amen Oyiboke
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
It’s important to avoid money mistakes throughout the year, but doing so is especially important in January because this is typically when you try to establish positive habits for the new year. In fact, many people make New Year’s resolutions specifically geared toward improving their personal finances.
Unfortunately, January is also when many people make mistakes that can “significantly impact” their financial stability for the rest of the year, according to a new report from Coupon Mister, an online platform that provides access to thousands of discount codes, coupons and deals from top retailers worldwide.
“People’s financial self-control tends to dwindle in the new year and their emotions may get the better of them,” said Fred Harrington, Coupon Mister CEO in a press release. “To avoid this, identify your money mistakes and use professional advice to develop a plan you can stick to.”
A survey conducted last year by the UK-based Nationwide Building Society found that more than half of respondents (52%) said January is the time of the year that causes the most financial stress. This is mainly because of post-holiday debt and high heating bills.
Here are six common money mistakes in January and how to avoid them.
Ignoring Credit Card Debt
It’s not unusual to get hit with high credit card debt in January because of holiday spending, but the last thing you want to do is delay paying it down.
“Prioritize paying off your debt and consider consolidating it into a lower-interest loan,” Harrington said. “Always make your minimum payment at the very least to protect your credit score.”
Not Tracking Your Expenses
As Coupon Mister noted, it’s easy to lose track of your spending after the holidays. But this is not the time to ignore it. Instead, put a high priority on tracking your spending and seeing where all the money goes.
“Many people create a budget at the beginning of the year but fail to review it regularly,” Harrington said. “Take a look at your budget and expenses to see where you can make adjustments and save more money.”
Overspending On Post-Holiday Sales
According to Coupon Mister, many consumers get “carried away with all the great deals and discounts during post-holiday sales.” But you should resist the urge to overspend on these deals and pile up more credit card debt. Instead, stick to a budget and only purchase what you genuinely need.
Making Impulse Purchases
Similarly, many consumers make impulse purchases when they see all the sales and deals being offered in January.
“Professional marketers are very savvy and know just what to say to relate to your situation and entice you to buy,” Harrington said. “Resist this urge unless it’s already planned for in your budget.”
Not Planning for Tax Season
You might not be thinking about tax season so soon after the holidays, but January is a good time to begin organizing your financial records to reduce stress and avoid errors when tax season does roll around.
Not Taking Advantage Of Employee Benefits
Another common money mistake in January is failing to review the various perks your employer offers, such as 401(k) matching programs, health savings accounts and bonus incentives. Take time at the beginning of the year to see if your employer has any new programs available that can boost your finances.
“If need be, arrange a meeting with your boss or manager to get the specifics of everything that’s included in your plan,” Harrington advised.
More From GOBankingRates
