Most of us are guilty of announcing our intentions to make and keep very worthwhile New Year’s resolutions and then falling at the first hurdle sometime in January or February. Getting to grips with our finances is a popular resolution, sitting right up there with losing weight, taking up a new hobby and generally becoming a better person. Yet how can we improve our financial outlook in practice, especially in the post-Christmas period when the dreaded January credit card bills arrive on the doormat?
Set achievable goals
Just as you don’t set out to lose three stone in one month, so you cannot expect yourself to achieve your financial nirvana in just a few weeks. This is unrealistic. Instead, set a series of goals, starting small and working up to larger ones. Plan ahead for the next twelve months and try to work out what you can realistically do to save money without causing financial hardship. You might look into reducing your food bills or shopping around for lower broadband rates or car insurance. Is it time for a catch-up with your accountant for a financial MOT?
Break your bad habits
Take a long, hard look at your spending habits. Do you stop for a coffee every day before work? Have you grown accustomed to take-away meals at the weekend or to outsourcing your ironing when you could actually find time to do it yourself? Cutting down on unnecessary spending will really help you to build up savings, contribute to a summer holiday fund or pay off outstanding debts. It can lift the mood in the longer term, instead of providing short-term gratification that never lasts for long. So make 2017 the year you take your spending in hand!
As part of your financial review, look into how you can make your money stretch further in the weekly shop. Try out cheaper brands at the supermarket and look out for multi-buy deals and discounts. There are often vouchers to be found online, in magazines or via leaflets and flyers. Look out for financial incentives to switch utility providers, insurers and bank accounts too. Loyalty is rewarded less and less these days as companies vie for your custom.
Writing down how much you spend, when and what on can be extremely eye-opening. You can spot trends, such as the weeks or months when you spend more money, or the outlets you frequent the most. Keeping your receipts also allows you to check them against your bank statements and detect any fraud as soon as it happens. Don’t forget to keep track of your income too and chase up any late payments. Half an hour or so spent tracking your finances every week will give you a much better idea of how you are managing your money. You might like to engage the services of an accountant with this process, especially if you are obliged to submit self-assessment tax return or other financial records to HMRC. Your accountant will be able to advise you on the best way to sort out the paperwork.