3 New Year’s resolutions to get your finances in shape
Forget diet and fitness resolutions (which, let’s face it, rarely last beyond February). How about making some financial resolutions this year? After all, your personal finances are such a huge part of life – they shape your ability to achieve other life goals, and have a dramatic impact on health and wellbeing.
Here are three achievable personal finance goals that we think everyone – regardless of income – can aim for this year.
Set a realistic budget
How come some people have a really healthy income yet they’re still bad at managing their money? The answer lies in budgeting – or rather, lack of it. Budgeting is hands-down the best thing you can do for your financial health.
In practice, this means:
• Creating a monthly budget that covers all your bills, groceries and other regular expenditure.
• Working out how much is left over for discretional spending each month.
• Sticking to that spending limit. If a purchase will take you over the limit, try to wait until next month (you may find you don’t even want it next month).
Save, save, save
The golden rule is to save 10% of your monthly income, but even if that’s not achievable, saving just a little bit each month is a great habit to cultivate. So, having worked out your budget, set yourself a monthly savings target. Then set up an automatic payment to transfer that amount into a separate savings account every month.
If you need to cut back on spending in order to save, you could try:
• Switching to different utilities providers (and pocketing the difference straight into your savings account each month).
• Writing a weekly menu so you know exactly what food to buy at the supermarket, making it less likely to buy more than what you need.
• Shopping second hand.
Work towards being debt-free
Getting out of debt is an amazing feeling, and it is achievable. Sure, it may take some short-term sacrifices, but it’s worth it. You can make a start this year by:
• Transferring existing credit card debt to an interest-free provider – but you must close the previous credit card, so you’re never tempted to use it.
• Saying no to new credit cards and store cards (and declining offers to increase your spending limit).
• Setting up a debt payment plan with your provider(s) to fully clear your debt.
These general tips are a solid starting point for anyone. But if you’d like more tailored advice, talk to Jupp Castle about getting your finances in shape this year.
(Background photo created by pvproductions – www.freepik.com)