Do you know exactly where your money is going each month?
How much are you spending on items you no longer need or use?
Start by getting to grips with ALL of your regularly outgoings:
Remember to include:
Weekly or monthly food shopping
Takeaway meals or coffees
Avoidable bank or credit card charges
Magazine or TV subscriptions
May be you could reduce your outgoings by reviewing things like house and car insurance, utility bills and mobile phone contracts etc. Are there any subscriptions you could cancel or other areas where you could cut back?
It’s not unusual to save up to 35% of your discretionary expenditure by undertaking this exercise.
2) Use a budget planner
A budget planner helps you log everything you earn and spend each month and lets you know if you have a surplus or shortfall. If you do have anything left over, you can then decide what you would like to do with it.
The Money Advise Service have a free online budget planner tool you can easily access:
Make a list of all your borrowings, sorting them in order of interest rates, proritising the highest at the top and total it all up.
Whilst it is prudent to have an emergency fund (a minimum of 3 months expenditure, but ideally 6 months), if you have any other savings which are earning a low rate of interest it is worth considering paying off something where you are paying a high rate of interest. But remember to watch out for any early redemption or exit penalties.
You do you have any credit cards you could switch over to an interest free, or lower rate deal? (Remember to cut up your old card!)
Could you consolidate any debts for a lower rate / monthly payment?
Could you make any overpayments on your mortgage or loan(s)? Even a small additional monthly amount can have a significant impact on the amount of interest you pay overall.
4) Know your allowances
The financial year for tax purposes runs from 6th April to 5th April the following year and there are number of annual allowances you may qualify for, including:
Tax Free Dividend Allowance
Personal Savings Allowance
Capital Gains Tax Allowance
Individual Savings Account (ISA) Allowance
5) The power of regular investing
If you are able to get to a position where you have a surplus once you have paid all your bills, the next step is to look at developing a regular investing habit.
The amount you decide set aside will obviously be based on affordability, especially if you have borrowing to reduce too.
Steady, regular investments not only mount up over time, but can also provide you with some protection in the case of sudden market corrections. Over the longer term, investing monthly tends to average out any market highs and lows.
If you already own any shares opt to reinvest any dividends you receive instead of receiving the money. This is one of the most powerful tools available for boosting returns over time.
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6) Set goals
Start by setting several small, short and achieveable mini financial goals.
Forget about any past economic events, or decisions you have made (especially bad ones) and focus purely on the the road ahead. Ticking off your mini goals one at a time will take you a step further to achieving the financial security which will allow you to enjoy the life you want.
Make sure any choices you make going forward, are done so with the end-goal in mind.
7) Get advice
During volatile ecomonic periods, it is easy to make rash decisions which can have long term financial implications.
Before you deviate from your goals or plans, or buy or sell any investments, seek professional advice. Discussing any concerns with an advisor will help remove your emotions from the decision making process and ensure your financial planning strategy remains on track.
When it comes to planning for the future financially, there are many areas to explore. If you would like to book a free 30 minute initial chat, please click the button below, or contact Tony Thomas on 07585 592494 or email@example.com