The start of a new year is an ideal time to review your budget and make sure you will continue to make ends meet in 2016. This week’s show will give you some useful tips on how to take full control of your finances for the new year. The topics we will be covering are summarised below:
- Keep a short-term financial diary.
For a month keep a log of all financial transactions, however small. At the end of the month compare with previous spending & the difference should be immediately noticeable. Writing down all financial incomings/outgoings will keep you more accountable & should help pull you up on those impulse buys.
- Provision for emergency
Typically, the advice is that you should have 3 Month’s Salaries put away in case of emergency. Of course, this is much easier said than done. However, make an effort to prioritise your savings. This leads on to our next point…
- Treat your savings as a bill
It is easy to have savings as a ‘low priority’ when it comes to monthly outgoings. However, having finances in place for those long term goals & for an emergency fund ultimately will leave your future self with more room to move. Decide on an attainable amount to put away each pay day, and prioritise it as you would paying your bills. Setting up a direct debit may take the temptation to skip the saving away.
- Treat debt as a priority
Paying off your debt should be another of those things you keep as high priority each pay day. If you have savings in place you should struggle to find genuine reason to have any credit card debts or loans. More than likely, you’ll be paying a much higher interest on those debts than you can earn in a savings account. In most cases you’re better off using your savings to reduce your debts to as close to zero as possible.
- Get into the practice of budgeting
Establishing a good budget will in the long term take the stress out of managing your finances. Having a good idea of where your money is coming from & going to will give you more confidence in what ‘wriggle room’ you may have financially. Ultimately this should lend to a more comfortable life from pay-day to pay-day, as opposed to the potentially stressful method of ‘flying by the seat of your pants’.
Follow link to Money Talk on Channel Radio. Listen live at noon on Friday 8th January or to the repeat on Tuesday 12th January or download from Listen again and play at your leisure…