Being only a few days into the new year, many people are starting to plan for 2024. We’ve created a handy checklist to help you start the year fresh financially. If you’ve never budgeted before, now’s the time to find out how much money you could save for the future.
- Check your outgoings
Before you can look at any practical steps, such as creating a budget, calculate how much money you need to cover your expenditure. List your typical outgoings, such as household bills, food and fuel costs, mortgage payments, and car leases. Plenty of budget apps are available, or you could use Excel or Google Sheets to create a simple spreadsheet. Add everything up to see the total cost.
- Consider your wellbeing
Taking practical steps to improve your financial wellbeing will also help you improve your emotional and mental wellbeing. Money-related stress can have an impact on our health. Stress reduces our immune system, which increases the likelihood of illness. Ongoing financial problems can lead to people feeling depressed and anxious. Once you take control of your finances, your outlook on life will improve.
- Remove unnecessary costs
Go through your bank account and cancel old subscriptions or services that you no longer need. This could be a TV channel, for example, that nobody really watches or one that your children used to watch. If you’re paying several pounds a month for a service you no longer need, this can add up to hundreds in the long term.
- Pay off any debts
We realise this might not be an easy task, but if you want a fresh start in 2024, try to pay off as many debts as possible. In the first instance, focus on credit cards where you are paying high rates of interest. If you pay monthly for certain products, services or policies by direct debit, you will usually save money if you pay annually instead. Every little bit helps, so try and get ahead from a debt perspective.
- Set a budget
Once you have done the above steps, it’s much easier to create a realistic budget that will cover all your outgoings. This will enable you to understand what money is coming in and going out each month. Go back to your expenditure and deduct this list from your salary or average monthly income. This will leave you with an amount of disposable income, which will enable you to plan and save for the year ahead.
- Add to savings
With a budget in place, you can start looking at making or increasing any payments to savings accounts and pension schemes. Increasing your pension contributions today will help you achieve a more comfortable retirement in the future. There are a range of tax-efficient savings options available such as ISAs and premium bonds.
- Check your goals
If you’ve made some new goals for 2024, compare these with your new budget. Do you have a large enough cash reserve to achieve your aims and aspirations in the short term and long term? Do you need more tax-efficient ways to make your money work harder for you so you can realise your goals?
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Gaining full control of your finances will lead to a better standard of living so you can enjoy your lifestyle. It will also help you implement sensible retirement plans, which could result in you leaving work sooner.
At Balance: Wealth Planning, we provide financial advice and planning across every area of your life. Our financial planning team will help you build your wealth more effectively with sensible investments and savings strategies. Using a sophisticated cash-flow planning tool, we will help you understand your financial position, providing a foundation for your financial plan.
We wish you a happy, healthy and prosperous 2024!
Would you benefit from a financial review? Get in touch to speak to our financial planners.