There are only a few more weeks left of 2016. And what a year it’s been! When the ball drops on 31st December, we will be propelled into a brand new year where anything is possible. In the chaos of New Year health and diet resolutions, don’t forget your finances. If your financial situation has been less than stable over the last year, now is as good a time as any to take stock and put a solid plan in place.
Review And Plan
The lull between Christmas and New Year, when the chocolates and Christmas cheeses are dwindling is a good time for thinking and planning. You have a break from work and a little bit of quiet time. Sit down with your partner and go through what you want to achieve as a family in 2017. For most people, this will involve some element of financial planning.
Begin by reviewing 2016. What went well? What could use some improvement? It’s not about blame or being negative. It’s more about accepting what has gone, learning from that and moving forward. Set yourself some clear targets on what you want to achieve financially over the coming year. Rather than outlining general targets, be as specific as possible. So if you want to increase your income, be precise about how you intend to do that. This could include going for a promotion, changing jobs, cutting costs, etc. Or if you want to go away on holiday, outline how you’re going to put aside money each month.
Once you have your objectives in place, work out how you are going to achieve them. Make a list of what you intend to do, how you intend to do it, when you intend to do it and how you will measure your success.
By the time the New Year arrives, you will have a sound financial plan and a good idea of how you are going to achieve your goals.
It’s always a good idea to have a contingency plan in place, or a plan B. What happens if you or your partner lose your job? What happens if you receive an unexpected household expense? What then? If you don’t already have a rainy day fund, now is the time to work towards it. Put away as much as you can afford each month and don’t touch it. Even a little is better than nothing as it mounts up over time. Then, if something unexpected does occur, a little of the stress can be removed because you already have funds available to deal with it.
While you’re building up your rainy day fund, you may need to raise short-term cash in a hurry. This may be tricky if your credit score is low. However, services such as Cashfloat bad credit loans can assist, even if your financial background is a little murky.
Save A Little
In addition to your rainy day fund, it’s likely there will be other things you will need to save for. For example, if you plan to go on holiday, or saving for next Christmas, etc. Try to set a little money aside each month for this. Once you get into the habit of doing this, you won’t notice being without the cash.
When reviewing your finances, look in detail at areas where savings could be made. Go through each of your outgoings with a fine tooth comb. Begin by asking yourself whether services can be downgraded or canceled. Do you need such an expensive cell phone and plan? Do you have magazine subscriptions that you’re not reading? Do you have a gym membership that you don’t take advantage of? Can you downgrade your cable package? If the answer to any of these is yes, the savings will mount up over the course of a year.
When you do your grocery shopping each week, do you find that you’re constantly throwing away food? Think about how much that food cost and the accumulated cost over twelve months. If this is you, then it’s time to shop smarter. When writing your shopping list, don’t think in terms of individual food items, think in terms of meals. Set up a grid on your PC so you can outline each meal over the course of a week. Write your shopping list based on the meals. Don’t be swayed by supermarket promotions, be strict and keep to your list.
It’s surprising what reviewing your finances reveals. Some families realize they could live a better life by downgrading and moving to a cheaper area. The savings they make on mortgage repayments and bills etc. is the equivalent of a pay rise.
Sources Of Income
As well as reviewing your outgoings, it’s a good idea to review the money that you have coming in. Are you due a raise at work? Is there a way you could take on more responsibility to earn more money? If not, is it time to look for a job elsewhere that is better paid? Do you need to undergo additional training to go for a job with a higher salary? Once you have outlined your options, you can set out a plan of action.
If your intention is just to raise a little extra cash, are their opportunities for overtime? If not, could you take on some additional work to complete in your spare time? There are lots of opportunities for earning some extra cash at home on a part-time basis.
Don’t Forget To Factor In Some Fun
When creating a plan, it’s important to be realistic. If you’re too harsh and set unrealistic targets, the likelihood is that you will fail. So, when establishing a budget, make sure you throw in a few treats. There are lots of things you can enjoy as a family that are relatively inexpensive. Having fun is important. If you can still do this and save at the same time, your plan will feel more realistic.
Don’t put your financial planning off. Think about what you could achieve by this time next year. The time will pass anyway, so you may as well make it count.