It’s Friday Peeps!
If you haven’t done so already, January is an excellent time to review your finances.
There are 2 aspects to this, budgeting and goal-setting.
Firstly, check on the health of your monthly budget, if there are any issues then deal with those first (or at least have a plan to if they are too big to solve in one go). If you need help with any of this, check out my budgeting posts.
Secondly, set goals for 3 areas: income, savings and expenses. This sounds easy and can even be fun, but you will need to set aside some time to do it.
Income goals are basically answering these questions: Do you have enough? (May need to increase monthly expense to meet other goals below.) Where does it come from? (Are you happy with current employment? Do you need to add a side business?)
Savings can be broken down further into Emergency, Long Term, Events and Children. You should have an emergency fund of 500-1000 in case you need to visit sick people/pay insurance excess/repair your car. If it sounds like a big goal on a small budget, try to find ways to earn it…online, sell your old stuff, babysit…you’ll be surprised how quickly you can get there.
Long-term are you saving for a house, retirement or just a rainy day? Events you know are coming…we all have big occasions like weddings and special birthdays and babies arriving so start saving a bit towards it all.
Lastly, if you have children, (or are planning to) save now! They will require big school trips to be paid for, driving lessons, college, weddings…the list is endless, so start saving so you can help them in the future.
Expenses, including the aforementioned occasions, need planning for. As well as the life-events above there will be more mundane, but regular expenses: Insurances, tax, car MOT/tax/insurance… depending on what you earn, where you live and what you insure. These things all have set dates, so plan for them, save it back throughout the year.
There are 2 ways to approach saving, either put back whatever spare you can or have a set figure in mind for something and work out the monthly savings to get there. I recommend both. Things like college and wedding funds for babies can be a ‘what you can’ for now but set events and annual bills have a very clear amount and end date so you can work out what you need to save each month. If you don’t have enough to cover all these, then prioritize and revisit the income goals and budget above.
I hope that helps to set you up for the year, happy budgeting!