There’s no better time than the New Year to turn over a new leaf. After the indulgence of Christmas many people begin to focus on their finances and, with this in mind, I thought some tips on where to start would be helpful.
Firstly, it’s often easier to begin with the end in mind and visualise your goals. I also think that once you have identified your goals, you should write them down. These could then be organised into categories too – for example, short, medium and long-term. It also helps if you think of your objectives like a road map, with the short-term ones closest and the long-term ambitions the furthest away. This way, you can see where to start channelling your efforts.
Your short-ranging aims can be met from cash savings. This money needs to be easy to access – and that is crucial. Therefore, it would be a good idea to separate your savings from your everyday capital to ensure you aren’t tempted to use this unnecessarily within the month.
Also key, is establishing a budget, as this will help you stay on track with your finances. It will also assist you in identifying what you spend – and any savings that you could make. It’s important with any budget though, that you are honest about your spending. Writing this down and reviewing it regularly is a must.
Once you know how much you spend, you can start to plan your savings strategy. If you spend all the money you earn each month, how will you be able to lay the foundations of your future? In truth, savings need to be a habit that is as regular as your rental payments. Setting a savings goal at the start of the month – when you’ve been paid – can work well instead of leaving it and just seeing if you have anything left to put aside at the end of the month.
Take advantage of help from others too – such as your workplace pension. This is a great way to start saving for your retirement, and to get some money from your employer towards it.
In today’s digital age, you can use tech to help set targets and monitor progress. Most online banking apps have help in this area, so make use of them.
Finally, consider the risks on your financial journey. It’s all too easy to concentrate on the objectives, but what happens if you are ill and are unable to work? How would you manage financially? This is where insurance policies can really help.
If you want assistance with tax or on deciding what to save or invest in, this may be where the help of a financial planner could really reap rewards. An expert can help you prioritise and, if you are time-poor, ensure your plans are – and stay – on track.
If you have any questions or would like to find out more about Louise Woollard’s financial planning services, please contact our friendly team on 01484 507771.
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