Facing your bank balance after the festive period can be overwhelming. Gift-giving, attending celebratory nights out and paying travel fees to visit relatives can amount to a hefty sum. Recent research found that the average Brit spends £1,116 at Christmas.

Overindulging during the holidays often results in attempts to ditch bad habits and make self-improvements in January, including around money. However, getting your finances back on track can seem challenging, especially for students and graduates with low student loans and starting salaries.

A YouGov survey found that ‘saving money’ was the third most popular New Year’s resolution among respondents, while more than a third wanted to stick to a budget in 2020.

But what’s the best way to responsibly manage your money to ensure you achieve your goals and avoid making similar financial mistakes this year?

Create a monthly budget
To replenish your bank account, you need to be aware of how much you’ve spent over Christmas and create a budget plan to determine your monthly income and living costs.

Ashley Tate, chief executive officer at online student bill-sharing tool Split The Bills said: “So many of us justify impulsive spending over the festive period by thinking: ‘Why not? It’s Christmas,’ without considering the consequences. However, once January is here, those consequences become impossible to ignore when you are faced with the cold hard reality.”

Make a note of all fundamental monthly payments such as rent, bills and supermarket shops, and subtract the quantity from your income.

Dennis Harhalakis, founder of Cambridge Money Coaching adds: “Getting on top of your finances requires an investment of time and this time needs to be scheduled. Willpower is not enough. Make some time and stick to it.”

If you have any money left over, try dedicating a small amount to savings and small luxuries such as takeaways and going out. However, if you don’t have enough to cover the essential payments, you may need to adjust your budget.

Fabian says: “Try to keep your lifestyle in balance and change certain expensive habits. Why not switch from high street brands to charity shops when it comes to clothing? You’ll save money and likely find better quality items.”

Keep on top of your bills
Many students and young professionals live in shared accommodation to save money but this can make it difficult to organise utility costs.

Some may choose to offload the responsibility onto one tenant. However, this could lead to confusion around bill costs and whether price increases occur which could result in overspending on budgets, and not having enough left to cover the bills.

Joint accounts ensure everyone has access to each bill cost but if the account goes overdrawn, payments are late or if anyone already has bad credit, it could result in bad credit scores for all account holders.

Ashley adds: “A bill-splitting service can simplify the budgeting process by organising all utility payments into one monthly fee per person, so everybody is aware of the exact amount they owe. And it eliminates the risk of late payments.”

Find creative ways to save
A survey from 2019 found that 15% of Brits had no savings at all, with 22- to 29-year-olds being the worst at saving. While 40% blamed lacklustre earnings for not having saved, two-thirds of Brits confessed to not having a financial plan in place.

Ashley says: “Figure out what your financial priorities are. If you are saving for a house deposit, a summer holiday or a car, calculate how much you can save each month and how long it will take to reach the total amount.

“Begin by going back to the basics. Get a piggy bank and put in any spare change you have. If you generally don’t carry physical money, use an app that rounds up every purchase to the nearest pound and invests the difference into an online savings pot.”

The ‘1p Savings Challenge’ can help you save £671.61 within a year. This involves saving one penny on the first day and adding another penny each day until you reach £3.66 on the last day of 2020, which is a leap year.

Dennis adds: “Calculate what you spent on Christmas and aim to put away at least 5% of that amount each month and next Christmas will be so much better. If you can save 10% then you will have extra money for Christmas 2020.”

Sell unused items online
January is the perfect time to have a sort-out. Selling items that you no longer use and which take up valuable space can earn you some extra money while keeping your home tidy and organised.

Fabian Broeker, assistant editor at self-help money site Money Magpie said: “Declutter your house and declutter your life. Sell everything that you haven’t used throughout December; they are likely things you don’t need. This will give you a surprisingly large cash injection to kick-start the New Year.”

Although Christmas gifts should always be appreciated, if you’re certain the item won’t be used, consider selling it on second-hand shopping apps and websites such as eBay and Depop.

Facing the reality of how much money you spent over the festive period can be daunting. However, this is the only way you can get your money back on track. Creating a budget, setting saving goals and adjusting your lifestyle will help you stick to your financial New Year’s resolutions.