Ok, it’s a pretty bleak sounding title but unfortunately, for a lot of people it’s very, very real… especially when it comes to overspending at Christmas.

But I’m not writing an article on how to control your spending at Christmas – you can read all about how to avoid credit card and loan debt at Christmas here. I’m writing this article to examine the ways in which you can prepare yourself for the financial depression that January is likely to bring with it.

A lot of people’s Christmas payday tends to be around mid-December (or early January if you’re unlucky). As a result they end up turning to credit cards and bank overdrafts to help meet the cost of Christmas… inevitable for many, no matter how hard they try not to.

So what can you do to help keep January’s financial depression at bay? It’s a good question if you think about it and not many people have a straight answer. Unfortunately many look at how they can extend their lines of credit – by either trying to increase their credit card limit, extending their bank overdraft or by turning to a payday loan to help them out of financial difficulties.

So a payday loan or extending your credit card limit doesn’t sound too hot, especially after spending so much money over Christmas and is definitely something you should avoid at all costs.

So, on the 1st January why not sit down and write down a list of resolutions? Just make sure you include “controlling my spending and avoiding further debt” as the number 1…

It’s just not that simple is it? Of course it isn’t – you and I would be a fool to think otherwise. Instead why not sit down and write down three lists:

1. A list of existing debts you need to repay and the total amount (include dates they need to be paid by)

2. A list of your usual monthly bills – i.e. mortgage / rent payments and utility costs

3. How much income you have for January and how much you will have left after paying your standard monthly bills

Now – if you total your existing debts with your monthly bills you can see the full extent of your expenditure for the month. If your expenditure exceeds your income then have a think about what debts can wait until the following month – or at least until your next payday.

The most important thing is to pay off your usual monthly bills before anything else. Then take a look at what you have left over. If your finances end up looking a little “sick” then you could either -

Repay the minimum debt on your credit card / bank overdraft or contact your credit card / bank account provider to discuss a repayment plan to avoid your debt being passed to a debt collection agency and a default being put against your name. Trust me – this is something you really do not want as it could ruin your credit score.