A new year is a good time to assess your goals, whether that’s fitness, career or finances. When it comes to financial goals, consider the long-term as well as the next 12 months.
But if the start of a year is your catalyst to getting your financial house in order, our advice is get a plan in place today. Don’t leave it until tomorrow because tomorrow never comes, and you risk another year passing by without anything being done.
We know everyone has different goals and ambitions, so our tips are a useful starting point. Just remember that your financial plan is as individual as you!
Time to budget
Budgeting sounds like a very obvious place to start a financial plan. If you have no idea how much money is coming into and out of your bank account, you will find planning finances impossible.
Some people earn a good income but struggle with money because they have no budget in place. Managing your money properly gives you the ability to enjoy what you earn without over-spending and using credit excessively.
A monthly budget should include what money is coming in as well as what goes out. So write down what you are spending each month: food bills, mobile phone, utilities, mortgage, memberships, car costs etc.
There’s no point asking a financial planner to help you achieve your goals until you have an idea of your monthly budget. At a discovery meeting, a financial planner wants to know what you need to live each month, so now is the time to work it out!
- Set up a monthly budget and stick to it
- Reduce unnecessary spending
- Assess your budget regularly
Control your debt
When unexpected events happen, it is all too easy to grab your credit card. But debt has a nasty habit of increasing more quickly than you expect thanks to high interest rates.
Being debt free may sound like nothing more than a dream to you at the moment, but with proper financial planning it is possible. Start by setting up a repayment plan and make a commitment to stick to it; make sure you repay the most expensive debt first.
Reduce spending on treats to pay off your debt. Look at switching your credit card to one offering 0% on balance transfers. Some cards offer 0% on balance transfers for 2 years or more. This means you won’t be paying interest on top of what you owe.
Just make sure you pay more than the minimum and work out how long it will take you to repay the debt in full. In some cases, even taking a personal loan to consolidate debt can be a sensible idea, as your debt will be set to a structured repayment schedule. Just make sure you shop around for the best interest rates!
- Reduce discretionary spending where possible
- Sell any unwanted items (such as old mobiles)
- Have a plan in place to repay debt, starting with the most expensive debt first.
Save some money
There is one thing to learn from the past year, and that is unexpected events happen! Saving for a rainy day sounds like an old adage, but it is a very wise one.
No-one knows when they will need a few extra pounds to get them through a tricky time. Bank savings accounts are not the place to give you good, long-term returns, so don’t use them for a retirement nest egg. Having savings available for an emergency, however, is better than reaching for a credit card.
Sacrificing a few takeaways (or meals out when you eventually can) will really pay off when you need some extra cash.
- Reduce your grocery and takeaway bills
- Find ways to save on utilities
- Set a monthly savings goal
- Start with short-term financial goals and work to long-term ones
Investing allows your money to grow over time in a way that savings accounts cannot offer. Choosing to invest can be useful for long-term goals, as history shows that your money is likely to grow over time.
At Co-Navigate, we will look at your individual circumstances before suggesting if and what you should invest in. As well as the money you may wish to invest, we will consider your individual goals.
While you can invest on your own, it is always better to speak to a financial planner. They have not only studied the subject but have a wealth of experience.
- Speak to a financial planner
- Set long-term goals
Setting goals is an important part of financial planning. Without them you are more likely to spend money you don’t have or waste it.
Our aim is to help clients relax about finances knowing they have a plan in place to ensure that they will achieve their goals. It also ensures that their family will be all right should the worst happen. Even during tough times, such as those we are facing now, knowing you have your finances in shape is one less thing to worry about.
Contact to us today to arrange a free online discovery meeting.