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How To Start 2019 Without A Financial Hangover

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financial hangover
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How To Start 2019 Without A Financial Hangover

The great thing about approaching the end of the year is that we’re coming up to a fresh start. It’s a chance to wipe the slate clean and start again and never is that more important that when it comes to your finances. With many people getting into debt over the Christmas period with the cost of gifts, social events, food and drink and extras like more heating and additional travel, beginning the New Year with your financial priorities sorted and without the shadow of debt hanging over you is an attractive prospect.

Create a Frugal Budget

If you have an aim to save more or clear down your debt in 2019, the first thing you’re going to need to do is either revisit your personal budget or if you don’t have one already, to create one. A well-planned budget is a tool that will enable you to make your money work hard, and to achieve the things in life that you want to – be it education, travel, a home or a wedding. Take the time to go through the last two or three months of your bank statements and really analyse all of the transactions. Note down all of the essentials – utilities, rent, groceries, fuel etc – and make sure you are aware of exactly what those costs are. You can then work to optimise them by using price comparison sites to find the best deals and save some money. Next, take note of the areas of discretionary spending that you have – things like clothes, eating out or takeaways, nights out etc. It may surprise you when you look at exactly how much you’re paying out on those types of things.

Look at how you can change the numbers to make more money for your financial goals. Are their subscription services you aren’t really using or enjoying? Cancel them off. Could you switch to a data SIM only network to reduce your mobile bill? Are you able to make lunch and take it to work rather than grabbing shop bought sandwiches and coffees? Could you even cycle or walk to work to save on travel costs and get a health kick at the same time? The changes that it’s possible to make will depend on your own individual circumstances of course, but generally, there are always areas where you can cut back if needed. Don’t think of it as making a sacrifice – think of it as a positive financial move that will empower you to have more choices with your money and achieve your goals.

Set Up An Emergency Fund

In addition to saving towards your money goals, you will also need to set up an emergency fund to prevent having to go back into debt that you’ve just paid off should something unexpected happen. From sickness to job loss to costly home repairs, life has a way of throwing you a curveball just when you least expect it. Around three months living expenses are generally considered a good amount to aim for. Open up a savings account but make sure it’s one that is fairly accessible so that you can liquify it in a hurry if needs be. Then, set up a monthly direct debit to come out of your account automatically for the day after you get paid, so you don’t have a chance to spend all your money before you’ve saved.

Plan In Your Big Purchases

For larger purchases, plan up to a year in advance when you are going to buy them. It might sound odd, but this simple strategy can save you hundreds per year. Think about it. If you know you’ve had your washing machine for a number of years, it’s not unreasonable to think it’s going to break before too long. All electrical goods have a lifespan. Instead of waiting until it breaks and having to purchase one in a hurry, if you plan at the start of the year to replace it, and budget accordingly, not only do you have time to get the very best deal but you’re also not risking debt if it happens unexpectedly and you don’t have the funds to pay for it. You can apply this approach to all of your household purchases and stock up.

The January sales are a great time to pick up things like bed linens, soft furnishings and Christmas items for the following year while June is good for tools and appliances. And if you want to purchase a car, the weeks leading up to a plate change can save you thousands of pounds as dealerships bargain to get rid of inventory. Shop smart and you can save big!

Photo by JESHOOTS.COM

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