To start off the new year we’ve got some fantastic advice from the amazing Prabjit from My Side Hustle. They’ve put togeather a great post showing you how to get 2018 off a spectacular start money wise!
It’s that time of the year again where we have eaten too much and piled on the pounds as well as spending too much money and maybe we need to get back on track with our finances. This is a new year and time for a fresh start. Whether your new year’s resolution is to get out of debt, increase your savings or generally improve your financial situation, here are 5 ways how to help you achieve it!
- Reduce your outgoings
Reducing unnecessary expenses will give you more money that you can use towards your financial goals, whatever they may be. However we all know how easy it is to say ‘I will save an extra £50 per month’, but where will this £50 actually come from? Where will you cut back your expenses?
My question to you is do you really know how much you are spending? Can you say how much money you spent last month on clothes/food/socialising etc?
The problem is that a lot of people don’t realise how much money they are actually spending. If you don’t know how much you are spending than it is very difficult to know how much you can save and where you can reduce your expense.
If you are not tracking your expenses I challenge you to do so for at least a month, most likely you are spending more money than you think, particularly on items that you don’t need. Once you know where your money is going you will find areas where you can reduce your expenses.
- Start a side hustle
There is only a certain amount you can reduce your spending before you get to a point where you are not happy. There needs to be a balance between saving money and enjoying your life. So if you are at the point where you have cut down your expenses as much as you can, it is time to start earning more money. The Money Shed has plenty of ideas for how you can earn money online, there is also a very helpful community where you can find help and support as well as share your ideas.
For me the biggest money maker has been matched betting from which I have been making up to £500 per month, best of all this is tax free. That is a lot of money to put towards your financial goals. There are plenty of other ways of earning additional income such as mystery shopping, web search evaluator work and much more so check out The Money Shed Forums.
- Automate your finances
How do you save your money and where do you keep your savings? Quite often people save whatever they have at the end of the month and maybe even keep their savings in their current account. However, the difficulty with this is that you can inadvertently dip into your savings if it is kept in the same account as your spending money. You are also more tempted to spend money if you see a higher balance showing in your account.
I suggest automating your savings by setting up a standing order to a savings account the day you are paid, or towards your debt if you are looking to increase debt repayments. This way you are forced to spend only what is left over after saving and it is difficult to accidentally spend too much or dip into your savings. To make it difficult to be tempted by your savings you could save into an account that is not easy to access, for example an account where you need to give 30 days notice before withdrawing money.
- Educate yourself on personal finance
There is so much information available to us as well as misinformation and misconceptions from a variety of sources including family and friends. I think it is very important to not just follow the crowd and do something because people you know are doing it. Part of the problem is that lots of people are in debt and it has become the norm. If you want to save more money or learn about how to invest I would encourage you to read as much as you can regarding personal finance, whether this is from books or websites, and come to your own conclusion. Join forums and immerse yourself in a community of like-minded people who have the same goals, you will find there are a lot of people willing to provide help and support as well as discuss ideas.
- Have a plan to reach your financial goals
Think about why you are trying to improve your finances. What are your goals? Maybe you want to save to purchase a house or you want to save for retirement. Before you can create a plan you need to know what you are saving for and when you need the money. Research shows that you are more likely to achieve your goals if you write them down. Once you know how much you need and when you need it by then it is time to create a budget.
Sometimes things happen in life that are unavoidable and unexpected, these might through you off track from your financial plan. It’s important to accept these things happen and you can’t control them, all you can do is reassess your financial goals and do the best that you can.