If one of your New Year resolutions was to get in shape financially, we put together a few ways to help you stick with your commitment.
Take a look at your finances
Every year you should sit down and take a good look at your finances – it shouldn’t take too long so just set aside an hour or so in your day. Make an honest assessment of your incomings and outgoings to determine what goals you’ll make for the year.
Some people like to have a very clear budget so they can see exactly where their money is going each week. But this method doesn’t work for everyone, so you could try splitting your income into three bank accounts. One for saving, one for every day and one for spending. Work out how much of your income you need to put into your everyday account for bills and groceries, choose a percentage of your income to pop into your savings, and keep a small allowance for spending on whatever you like.
Taking control of your debt is a wonderful goal for the year. One way to reduce your debt is by getting rid of your most expensive debts, or ones with the highest interest rate first, like credit cards and overdrafts. Then work your way down to long term debts like mortgages. If that seems too daunting, you can start with your smallest debts first, and then you’ll feel a much better sense of achievement at getting them out of the way fast.
Set your goals
Setting yourself realistic goals will make it easier for you to stick with them throughout the year. If you start off too ambitious, you may be setting yourself up for failure. Split your goals into short, medium, and long term. Setting up a rainy day fund of around $500-$1000 is a great short term goal for any unexpected expenses.
If you’re struggling to put together a financial plan for the year ahead, give us a call! We’re here to help, no matter your financial situation.
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