You may have already made some New Year’s resolutions regarding healthy eating and exercise but could your finances do with slimming down too? The start of a new year, not to mention a new decade, is a great time to review your financial situation, examine your budget in detail and make plans for the future. Take a look at the following financial resolutions you could adopt for 2020.
If you haven’t already set any financial goals, now is the time to do so. But be specific. Rather than just saying you want to ‘save more’ or to ‘improve your financial situation’, focus on what you really want to achieve. Do you want to retire a certain number of years early, buy a holiday property or pay off a loan? By pinpointing your objectives, you will spend more time reflecting and plan more carefully. It also means it will be easier to see how you far you’ve got when you come to review your progress this time next year.
Once you’ve identified your aims, share them with others to make yourself accountable. That way you have more chance of achieving them.
If you’ve already set some goals, why not take stock and review your objectives? Do they still fit with your circumstances and what you want to gain out of life? Or do you need to make some slight tweaks?
Track your budget
Setting a budget may sound obvious but sticking to what you’ve outlined is the foundation of good financial management. There are many apps around today that can help you log your spending and more importantly identify where the leaks are occuring. An end of year summary from your bank or credit card company will help you analyse which categories are the main culprits so you can address them in the coming year.
Watch those habits
Take a look at any financial mistakes you made last year. Did you overspend or overborrow?
Have you got into a bad financial habit, such as eating out too often, having too many take-out coffees or always paying full price for clothing? If so take a step back, think about the underlying reason and try and change your behaviour.
On the flip side, if you’ve adopted any good practices try and consolidate them by automating them. If you want to save more for your retirement or repay a debt, automate a monthly debit through your payroll or bank right now while you’re feeling motivated.
Why not get into the habit of having a ‘no-spend day’ or ‘no-spend weekend’ each month? Eat at home, don’t go shopping and find free entertainment. You may be all geared up to get fit at the start of the year but think twice about an expensive gym membership, particularly if you’re the type of person who ends up skipping sessions once the novelty has worn off. Instead try working out in the park, going for a long walk or using one of the many free exercise apps.
The goal is to make reviewing your finances a habit, not something you just consider on an annual basis.