The start of a new year is an excellent time to review your financial plan for the coming year and beyond. The secret to hitting the mark on your financial goals and resolutions is to take the time to plan a budget and to consult it regularly to track your progress. This guide shows you how to revitalise your financial situation and achieve your financial goals more quickly.
1. Learn budgeting basics
Good budgeting involves setting financial goals, tracking your expenses, reviewing them, working out what you can cut back on, and learning to manage your spending so you achieve your goals. Set up a budget and ensure that it is as detailed as possible. Then match your budget, including your spending and savings targets, to long-term goals such as buying a new house or car.
2. Smart budgeting requires action
Most people know how critical budgeting is for financial success, but acting on your budget is even more important. A budget that’s not followed serves no purpose! Here are some ways to keep your budget on track:
- Actionable steps. Fortunately, taking action to meet spending and saving targets is easy if you break every goal into small, actionable steps. Start your budgeting process by listing the major goals you would like to achieve. Once you have done this, break down each goal – whether the goal is short-term or long-term – into actionable steps. These actionable steps can act as a guide and motivator, so you know exactly what you need to do at every stage to achieve the goal and to stay on track. Set a realistic time frame for achievement, and commit to seeing each step through.
- Develop good habits. The other element in taking action on a budget is to develop good financial habits. Rather than simply forcing yourself to persevere, developing good habits supports your success by aligning daily actions with your financial goals. For example, you can set up automatic deductions from your salary to grow your savings, go for a morning run instead of opting for a gym membership, or make your own coffee and lunch instead of eating out. You would be surprised at how much money these small changes save!
- Find your motivation. Review what motivates you the most and link your goals to these motivating factors. This could involve rewards for every milestone achieved. For example, if you enjoy travelling you can reward yourself with a short trip when you achieve a major financial goal.
3. Research products and deals
Make your savings work harder by researching products and deals that support your financial objectives. Start by looking for a high-interest savings account and be willing to switch to a new bank if they offer a better rate. You can also save more by researching and comparing products such as loans, mortgages, utilities, insurance, and other major expenses.
4. Find a mentor
Having a mentor gives you access to financial experience and another person’s point of view. Many financially successful people are pleased to share their tips on creating wealth, so find one or two mentors who can help you with extra advice on managing your finances.
5. Plan for retirement
Every good financial plan should involve retirement planning. The earlier you start your retirement planning, the more financially secure you’ll be when you reach retirement age. Integrate your retirement goals into your budgeting and overall financial goals, no matter how far away your retirement may be.
6. Take the first step today
Create momentum by taking the first step today. Whether you need to set up a budget or start paying off a loan, find one action step to do today to confirm your commitment to your financial goals.