How to avoid Blue Monday's financial woes

The third Monday in January, "Blue Monday", is said to be the most depressing day of the year and, for many, this negative mood is tied to their finances.

After a December "full of expensive festive celebration", many families will "start the new year already in debt" and may have "fears" about how to escape, said MoneySuperMarket.

But, while January can be "one of the hardest months of the year" for those struggling with their finances, Blue Monday can actually serve as the perfect opportunity to make the financial changes that will make spending and saving easier for the rest of the year.

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Cut unnecessary costs

January may be rolling on but it's definitely not too late to reduce your planned outgoings in 2025. In fact, "it is worth going through your bank statements" as soon as possible – "three months' worth would suffice" – to review all your bills, said Interactive Investor.

By analysing how much money is leaving your bank account and for what purpose, you will be able to "identify any unnecessary charges" or subscriptions you no longer need. These can then be cancelled or eliminated to save money, or you could "contact service providers to negotiate better deals" or discounts.

Understand your spending

Before you draw up a financial plan of action, you need to think about your personality, as this often affects "your relationship with money and debt", said Money.ca

Those who are cautious by nature are likely to have "little debt to begin with", while those who are "more of a risk-taker" may be open to assuming more debt – by making investments, for example – in hope of a "greater payoff" later. If you're in the latter camp, it could "put you at higher risk of getting in financial trouble".

Be especially wary at this time of year if you know you're an "emotional spender". Retailers are known to "capitalise on the concept" of Blue Monday to encourage emotional spending "to beat the blues" – and help their bottom line, said The Star.

If you've noticed you tend to spend more "during periods of low mood", make a promise to yourself only to spend intentionally and "mindfully", rather than getting carried away and regretting unneeded purchases later.

Get saving

If you miss the "burst of dopamine" your brain releases when you're buying something, you could try channelling that rush into meeting your savings goals instead, said MoneySuperMarket.

Achieving "financial milestones", whether big or small, can recreate a similar "rewarding" feeling as a shopping trip. Research whether a typical savings account or an ISA or other investments would work best for your money, and understand that investment typically carries risk.

But "you don't have to forgo treats completely" to save. Instead, you could build a longed-for purchase into your savings plan, waiting until you are confident your finances will allow you to purchase that item without worry.

This kind of "act of delayed gratification" can be "just as satisfying" as buying on impulse – with far less risk.

Investigate free activities

It can feel like it's hard to leave the house without having to spend something but there are activities "that cost little to nothing", and you'll soon find something that can effectively "combat Blue Monday blues", said Edinburgh Evening News.

Try visiting your local museum or going for a walk or, if the weather's grim, "journaling or meditating". All will "improve your mood without putting a dent in your wallet".

You can even turn saving itself into an activity, by following one of the saving challenges that are designed to make putting money away more fun.

Stay calm

While it may feel bleak, it's important to know that Blue Monday has "no scientific basis", said Interactive Investor. Neither mental health nor finances are "determined by a specific date in the year".

So, stay calm and stop yourself from making any snap decisions about your finances, as this could lead to "unnecessary anxiety" and "impulse actions". Instead, use the day to plan: an "analysis of your own circumstances" is the first step to achieving a better financial outcome by the end of 2025.